Open-end equity funds lost more than €76bn ($81.8bn) in 2016 while overall long-term open-end funds saw net inflows drop to just €75.1bn in 2016, down from €302bn in 2015 and €411bn in 2014.
With a shaky outlook for the global economy, the Brexit referendum and the election of Donald Trump in the US, the data suggests investors were opting for safer options such as money market funds which took €111.7bn, the highest level since Morningstar began asset flow data collection in Europe.
Investors shied away from committing new money in European mutual funds, says Morningstar’s editorial director Ali Masarwah, after events reduced the appetite for riskier investments.
“Interestingly, the November equity rally prompted by the election of Donald Trump as US president failed to generate an enthusiastic turnout among European open-end fund investors”, Masarwah said.
“Flows into equity funds picked up only modestly, while several bond Morningstar categories sold off in the last two months of the year.”
However, 2016 was not the “annus horribilis” for the active European fund industry, Masarwah added, with the number of assets under management up 5% on previous years despite the modest inflows.
