Annus Horribilis for the European Funds Industry

Morgan Stanley INVF Global Brands was Europe's most popular equity focused fund in 2011, though the European industry as a whole suffered

Dan Lefkovitz 26 January, 2012 | 6:12PM
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Skittish European investors fled funds of all kinds in December 2011, completing a year to forget for the open-end funds industry. Long-term funds saw outflows of more than EUR 23 billion in December and EUR 119 billion in the year, Morningtar Direct Europe Asset Flows show. Unlike 2008 when investor assets shifted from stock and bond funds to money markets, in 2011 investor capital left funds altogether.

Out of Stock, But to Where?
Macroeconomic fears and market volatility scared investors away from equities, with nearly EUR 11 billion fleeing the broad asset class in December and nearly EUR 70 billion for the year as a whole. December's outflows were on par with outflows in October and November. It was the seventh straight month of outflows for the asset class.

In contrast to the U.S., where investors fled equities to the perceived safety of bonds, the eurozone crisis tarred fixed income funds for European investors. Almost EUR 7 billion left fixed income in December and EUR 44 billion over the course of the year. Most of that came from EUR bond categories.

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Dan Lefkovitz

Dan Lefkovitz  is strategist for Morningstar’s Indexes group

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