European Investment Funds Rebound with €304bn Inflows
Discover how European investment funds bounced back in 2023, attracting €304bn in net inflows and surpassing €20trn in net assets.
European investment funds experienced a significant rebound in 2023, with a total of €304bn in net inflows, according to the European Fund and Asset Management Association (Efama). This marks a notable departure from the previous year's outflows and has pushed net assets above the €20trn threshold. The market saw a strong recovery in 2023, with Ucits and alternative investment funds (AIFs) both attracting net inflows, reversing the trend of net outflows seen in 2022.
Ucits recorded net sales of €202bn in 2023, a stark contrast to the negative net sales of €167bn in the previous year. Similarly, AIFs saw net inflows of €102bn, a significant turnaround from the net outflows of €105bn in 2022. This influx of funds led to an 8% increase in the net assets of European investment funds, surpassing the €20trn mark once again.
Investor interest in equity funds shifted in 2023, with equity exchange-traded funds (ETFs)leading the way by attracting €101bn in net new money. This preference for ETFs over non-ETF equity investments, which experienced net outflows of €94bn, reflects a changing landscape in the market.
Bond funds also saw a reversal in fortunes, with net inflows of €137bn in response to stabilised interest rates and the prospect of future rate cuts. This marks a significant change from the previous year's net outflows of €127bn. However, multi-asset funds recorded their first yearly net outflows since 2008, totalling €103bn, indicating a shift in investor preferences.
Money market funds reported strong performance in 2023, driven by an inverted yield curve that offered higher returns for short-term investment products. With net inflows of €172bn, these funds played a crucial role in investor portfolios. Additionally, ETFs had a record-setting year with net inflows of €169bn, underscoring their growing appeal due to cost efficiency and trading flexibility.
The European investment fund market experienced a significant turnaround in 2023, with strong net inflows and increased net assets. Investor sentiment shifted across the continent, leading to positive growth in various fund categories and highlighting the evolving preferences of investors.
European Investment Funds Rebound with €304bn Inflows
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