Assets under management in the European fund industry increased from €14.371 trillion at December 30, 2023, to €15.382 trillion at the end of June 2024, according to LSEG Lipper’s European fund industry report for the first half of the year
The increase in assets under management of €1.010 trillion was mainly driven by the performance of the underlying markets (+€837.9 billion), while estimated net sales contributed €172.7 billion to overall growth, wrote Detlef Glow, Head of EMEA Research at LSEG Lipper.
Glow said the majority of assets under management in the European fund industry were held by actively managed mutual funds (€11.845 trillion), followed by ETFs (€1.814 trillion) and index tracking mutual funds (€1.722 trillion).
Assets under management in European ETFs reached a new all-time high at the end of June 2024.
“The gap in assets under management between index tracking mutual funds and ETFs decreased over the course of 2024 since the assets under management in ETFs surpassed the assets under management in index tracking mutual funds within the first half of 2024,” wrote Glow.
“This trend was driven by the higher inflows in ETFs (+€104.0 bn) compared to index tracking mutual funds (+€30.4 bn) …
“In more detail, equity products (€6,601.7 bn) held the largest amount of assets, followed by bond products (€3,554.6 bn), mixed-assets products (€2,606.1 bn), money market products (€1,918.4 bn), alternatives products (€383.4 bn), real estate products (€244.4 bn), commodities products (€59.3 bn), and ‘other’ products (€14.0 bn) …
“The flow pattern for June drove the estimated overall net flows in the European fund industry up to €172.7 bn for the year 2024 so far.
“On closer inspection, mutual funds (+€68.7 bn) and ETFs (+€104.0 bn) enjoyed inflows over the course of the year 2024 so far. These inflows within the positive but still somewhat uncertain market environment are not considered unusual and might be a sign that European investors are somewhat in risk-on mode.
“With regard to the inverted yield curves for the Eurozone and other major economies in the world, it is somewhat surprising that European investors favored bond products over the course of the year.
“That said, the inflows into bonds might be seen as a sign that European investors in June anticipate the ending of the interest hiking cycle of central banks around the globe led by the ECB and the Bank of England. That said, the U.S. Federal Reserve seemed to postpone its first interest rate cut further.
“Overall, long-term investment products (+€106.0 bn) and money market funds (+€66.7 bn) enjoyed inflows for the year so far. That said, the estimated net flows for equities were dominated by the inflows into ETFs, while the inflows into bond funds were dominated by mutual funds.
“Taking a closer look, bond funds (+€152.9 bn) were the asset type with the highest estimated net inflows overall for 2024 so far. It is followed by money market funds (+€66.7 bn), equity funds (+€18.9 bn), commodities funds (+€0.5 bn), and “other” funds (+€0.1 bn). On the other side of the table, alternatives funds (-€5.6 bn), real estate funds (-€7.0 bn), and mixed-assets funds (-€53.8 bn) faced outflows for the year so far.”