Mutual funds in Europe suffered outflows of €19bn over the month of October, according to LSEG Lipper's European Fund Flow report.
Long-term products faced significant losses as well, shedding €45bn over the month, reflecting the trajectory for the year to date, with outflows of €27.6bn.
LSEG Lipper: October sees biggest UK equity redemptions since Mini Budget
By comparison, ETFs attracted net inflows of €15.2bn, while money market products attracted the highest estimated net inflows for the month (€41.3bn), with bond products holding the title of best-selling asset type this year, posting €110.5bn of inflows.
Among fund houses, JP Morgan was the best-seller in Europe for October, LSEG Lipper found, with €7.1bn inflows, while BlackRock has been the best-selling house for the year to date, attracting €64.4bn.
Detlef Glow, head of EMEA research at LSEG Lipper, noted the European funds industry had witnessed overall outflows during the course of last month, in a backdrop of a "further unstable market environment".
Equity indices faced a "drawback" throughout October, he said, contributing to the overall caution from European investors.
Global ETFs garner $61bn inflows in September
Glow added: "More generally, the market sentiment in October was also driven by hopes that central banks — especially the US Federal Reserve — may have reached the last phase of its fight against high and further increasing inflation rates and may, therefore, start to keep interest rates at least stable quite soon. Some investors already think there might be room for decreasing interest rates later this year, which might be reflected by the estimated inflows in bond ETFs.
"Nevertheless, these estimates are under scrutiny since the Fed seems to be further in a hawkish mode, as the rate outlook still includes potentially an additional rate hike this year and fewer rate cuts in 2024. Also, there are still some concerns about geopolitical tensions and the continuing normalisation of disrupted delivery chains, as well as the continued possibility of recession in the US and other major economies around the globe. These fears are raised by inverted yield curves, which are seen as an early indicator for a possible recession."
