European fund flows hit two-year high

Net inflows into European mutual funds hit a two-year high in July, reaching €46 billion (£40 billion), according to the latest data from Lipper FMI.

This new money was split fairly evenly between equity and fixed income portfolios.

Lipper says that July has historically been a good month for European asset managers as retail investors set their positions before going on summer holiday. However, this year sentiment was more optimistic than 2008, when redemptions hit €25 billion.

Fixed income funds as a whole took €16 billion of new assets in a four-year high which helped pull Italy’s sales out of negative territory.

Investment grade corporate bond funds benefited from a further €7.5 billion of inflows over the month, taking the total for the year to €40 billion—most of which has gone into euro-denominated products. This figure is more than the inflows for the last five years combined.

Convertible bonds and commodities also did well, with inflows reaching €2.5 billion for the month.

Lipper says cross border groups were the main beneficiaries of new inflows this year, with BlueBay, M&G and Schroders each taking a significant share. The group with the strongest net inflows in July was Schroders, with net sales of €2.8 billion.

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