European investors shun equities in April, Morningstar finds

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European fund investors appear to have turned their back on equities after becoming disheartened by the region’s dull growth prospects, the latest Morningstar figures suggests.

Morningstar asset flow data shows equity funds sold across Europe were hit by their first net outflows since August 2012 during April with an estimated €344m being pulled from the asset class.

This is in stark contrast to the record net inflows of €26.5bn seen in bond funds.

Ali Masarwah of Morningstar’s European fund flows team says: “The sketchy growth prospects for the eurozone appear to have dampened European fund investors´ appetite for equities in April.

“This contrasts sharply with strong inflows into fixed-income funds. Although the latter has been the trend for some time, April saw record-breaking net inflows into fixed-income funds.”

Alternative funds experienced “solid” demand over the month after taking €3bn. But this went into a fairly concentrated group of funds with the Standard Life Global Absolute Return Strategies fund alone capturing a third.

Overall, long-term open-ended funds excluding funds of funds and master-feeder funds saw €40.3bn in net inflows during April, taking the year-to-date total to €154.2bn.

In terms of individual funds, Michael Hasenstab’s Templeton Global Total Return was the most popular with net inflows of just over €2bn.

Richard Woolnough’s M&G Optimal Income Fund, Jeffrey Roskell and Stephen Chang’s JPMorgan Asia Pacific Income, Chris Dialynas’ Pimco GIS Unconstrained, Curtis Mewbourne’s Pimco GIS Diversified Income funds were also popular with European investors in April.