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European Fund-Flow Trends, December 2015

During December the European mutual fund industry enjoyed net inflows of €3.9 bn into long-term mutual funds. With regard to the overall flow pattern, it seemed European investors were returning to a risk-on mode, since equity funds (+€10.7 bn) were the best selling asset type in Europe for December, followed by alternative UCITS (+€3.2 bn), mixed-asset funds (+€1.5 bn), and real estate funds (+€0.4 bn). On the other side of the table bond funds (-€10.7 bn) saw the highest net outflows, bettered by “other” products (-€0.8 bn) and commodity funds (-€0.3 bn).

These flows drove the estimated overall net sales of long-term investment funds up to a healthy €328.8 bn for the year 2015.

Money Market Products

After strong net inflows for October and November, money market funds faced net outflows of €20.1 bn for December. In spite of these outflows, the money market segment still brought in estimated overall net inflows of a healthy €57.3 bn for the year 2015. This flow pattern drove the overall sales of mutual funds in Europe to a positive €386.0 bn for 2015.

Money Market Products by Sector

Within the money market segment Money Market USD (+€7.8 bn) was the best selling sector for December, followed by Money Market GBP (+€3.0 bn) and Money Market EUR Leveraged (+€0.8bn). At the other end of the spectrum Money Market EUR (-€32.9 bn) and Money Market AUD (-€0.1 bn) suffered the highest net outflows.

Graph 1: Estimated Net Sales by Asset Type, December 2015 (Euro Billions)

16 01 25 Graph 1 ENS by Asset Type

Source: Thomson Reuters Lipper

Fund Flows by Sectors

Within the segment of long-term mutual funds Equity Europe (+€3.2 bn) was once again the best selling sector, followed by Equity Eurozone (+€2.4 bn), Equity Global (+€1.4 bn), and Equity Germany (+€1.3 bn) as well as Mixed-Asset USD Balanced-Global (+€1.1 bn).

Graph 2: Ten Top Sectors, December 2015 (Euro Billions)

16 01 25 Graph 2 Sector Flows

Source: Thomson Reuters Lipper

At the other end of the spectrum Bond USD High Yield (-€2.1 bn) suffered the highest net outflows from long-term mutual funds, bettered somewhat by Equity US (-€1.9 bn) and Bond Global High Yield (-€1.6 bn) as well as Bond EUR (-€1.0 bn) and Mixed-Asset GBP Conservative (-€0.9 bn).

Graph 3: Ten Bottom Sectors, December 2015 (Euro Billions)

16 01 25 Graph 3 Flop Sector Flows

Source: Thomson Reuters Lipper

Fund Flows by Markets

Single fund market flows (including those to money market products) showed a mixed picture for December, with only 17 of the 34 markets covered in this report showing net inflows. Ireland (+€7.0 bn), Luxembourg (+€6.9 bn), Germany (+€3.9 bn), Belgium (+€1.6 bn), and Sweden (+€1.5 bn) were the domiciles with the highest overall net inflows, while France—driven by money market products—was the single market with the highest net outflows (-€35.6 bn), bettered somewhat by Spain (-€3.5 bn) and Denmark (-€1.1 bn).

Graph 4: Estimated Net Sales by Country, December 2015 (Euro Billions)

16 01 25 Graph 4 Market Flows

Source: Thomson Reuters Lipper

Within the equity sector funds domiciled in Ireland (+€3.4 bn) led the table for December, followed by those domiciled in Germany (+€3.2 bn), France (+€1.5 bn), Luxembourg (+€1.1 bn), and Switzerland (+€0.9 bn). Equity funds domiciled in Belgium (-€1.0 bn), Norway (-€0.3 bn), and Finland (-€0.2 bn) stood at the other end of the table.

For bond funds, products domiciled in Norway (+€0.6 bn) led the table for December, followed by funds domiciled in Germany (+€0.3 bn), the Netherlands (+€0.2 bn), Sweden (+€0.2 bn), and Portugal (+€0.04 bn). Meanwhile, Luxembourg (-€5.3 bn) was the domicile with the highest net outflows from bond funds, bettered somewhat by funds domiciled in France (-€1.8 bn) and Ireland (-€1.4 bn).

With regard to mixed-asset products Luxembourg (+€1.6 bn) was once again the domicile with the highest net inflows, followed by funds domiciled in Germany (+€0.5 bn), Ireland (+€0.3 bn), Belgium (+€0.3 bn), and Italy (+€0.1 bn).On the other side of the table funds domiciled in the United Kingdom showed the highest net outflows (-€0.8 bn), bettered somewhat by funds domiciled in France (-€0.2 bn) and Jersey (-€0.2 bn).

Fund Flows by Promoters

Goldman Sachs, with net sales of €6.1 bn, was the best selling fund group for December overall, ahead of BlackRock (+€5.8 bn) and JPMorgan (+€4.0 bn).

Table 1: Ten Best Selling Promoters, December 2015 (Euro Billions)

16 01 25 Table 1 Top Ten Promoter

Source: Thomson Reuters Lipper

Considering the single-asset bases, BlackRock (+€1.8 bn) was the best selling promoter of bond funds for December, followed by Fisch Asset Management (+€0.7 bn), KBC (+€0.5 bn), DNB (+€0.6 bn), and Swedbank (+€0.5 bn) as well as Eurizon Capital (+€0.4 bn). Within the equity space BlackRock (+€4.6 bn) stood at the head of the table, followed by Union Investment (+€1.2 bn), Deutsche Bank (+€1.1 bn), and Amundi (+€1.0 bn) as well as Vanguard (+€0.9 bn). The Spanish Santander (+€0.9 bn) was the leading promoter of mixed-asset funds, followed by DNCA Finance (+€0.6 bn), Blackstone (+€0.3 bn), and Allianz (+€0.2 bn) as well as Union Asset Management (+€0.2 bn).

Best Selling Funds

The ten best selling long-term funds gathered total net inflows of €5.3 bn for December. The split of the ten best selling funds by asset type was somewhat in line with the overall sales numbers, with the three equity products (+€1.8 bn) among the ten best selling funds accounting for the highest inflows on the table, followed by three mixed-asset funds (+€1.6 bn) and two absolute return funds (+€1.0 bn).

Table 2: Ten Best Selling Funds, December 2015 (Euro Millions)

16 01 25 Table 2 Top Ten Funds

Source: Thomson Reuters Lipper

Detlef Glow

Detlef Glow is Head of EMEA Research at Lipper, a Thomson Reuters flagship brand. In this position he is responsible for the Lipper research reports on the European ETF industry and special research reports on newsworthy market topics. Besides these tasks, he is acting as spokesperson for Lipper on TV and in print media, as well at conferences and expert panels. Detlef joined Lipper in mid 2005 from Feri Wealth Management, where he was Director of Portfolio Management, managing segregated accounts for high net worth individuals (HNWI). Prior to this he spent nine years with Tecis Holding AG, most recently as Head of Fund Research for Tecis Asset Management AG. In this role he was responsible for the quantitative and qualitative fund research for the Tecis fund of funds, the HNWI accounts and the recommendation list of funds for the financial adviser arm of Tecis. Detlef has an MBA focusing on Financial Services from the University of Wales/Cardiff, as well as a BA in Business Administration.”

Website: www.lipperweb.com

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