Bond Funds are Hot, Equity Funds are Not

The latest Morningstar European asset flow data shows investors are flocking to fixed-income but staying away from equities

Morningstar 29 May, 2012 | 4:09PM

The latest Morningstar European asset flow data for April shows investors are funnelling their money towards fixed-income funds and away from equity funds.

The data shows fixed-income attracted almost EUR 6 billion in new investor capital in April, building on a strong first-quarter for the sector. “This same preference for bonds has been evident in the US for some time,” explained Dan Lefkovitz from Morningstar’s European research team.

Meanwhile, equity funds saw a second consecutive month of net outflows in April, with roughly EUR 1 billion exiting the broad asset class. Investor sentiment has clearly soured towards Europe, with the Morningstar’s eurozone large-cap equity category suffering its fourteenth straight month of outflows in April. Overall, Europe large-cap value equity funds have lost EUR 2 billion in the year to date; and France large-cap equity funds have suffered similar outflows.

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