European fund sales show signs of 'great rotation' underway

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The European funds industry saw long-term fund sales drop in November following a cooling of the recent rampant appetite for bonds, according to Lipper data.

According to the most recent Lipper Fund Flash report, sales of bond funds fell back from the record high one-month sales of €30 billion achieved in October to sit at €20.7 billion in the most recent release.

Despite the pullback, it does mark the fifth successive month in which bond funds recorded sales in excess of €20 billion.

Interest also remained high in emerging market and high yield bond funds, which have attracted consistent levels of investment over the past year.

Meanwhile, equity funds, which experienced a sharp decline in sales between September and October, saw more positive data. Equity fund sales rose from €1.3 billion in October to €2.1 billion in November.

Lipper said this is mainly driven by sales of global emerging market funds (€2.1 billion), Chinese equity (€870 million) and Asia ex-Japan funds (€570 million).

On the other hand, UK equities saw €820 million of outflows and Euroland equities saw €660 million withdrawn over the month.

In terms of funds as a whole, long-term funds – excluding money market funds – achieved net sales of €22.3 billion in November. This compares to the €28.9 billion seen in September and €31.6 billion for October.

In the year to the end of November, long-term fund sales have therefore reached a total of €191.2 billion. Lipper said this leaves the industry on course to surpass €200 billion in fund sales in the full year data.

Five groups attracted net sales of more than €1 billion this month. These were: PIMCO (€3.2 billion); AXA (€2.1 billion), Standard Life (€1.2 billion), Aberdeen (€1.1 billion) and Nordea (€1 billion).