He said: “Despite the heavy redemptions, 2016 will not go down in the history books as an annus horribilis of the active European fund industry. Although inflows over the year were modest, assets under management of long-term open-end funds in fact rose to an all-time high of EUR 6.81 trillion, up 5% on the previous year. This also holds true for equity funds, which enjoyed a modest increase in assets.”
Bond funds saw inflows of €80.1bn, supported by investors’ willingness to chase yields in a market heavily influenced by the policies of the European Central Bank, Morningstar’s data found, and it was also a good year for passive funds which came close to hitting a 25% market share.
However, Masarwah said: “We think it seems still too early to expect index funds to lead in net flow statistics from here onwards. An analysis of flow trends in Europe reveals that whilst index assets tend to grow year after year, active fund flows are more volatile, but should still be expected to outpace index funds in favourable market conditions already because of their much larger asset base.”
