Investors continued to pour cash into Europe-domiciled equity funds in May, while fixed income funds suffered €16.5bn of net outflows and long-term experienced withdrawals of €15.8bn, the worst monthly result since March 2020. 

The latest Morningstar European fund flows report showed that equities managed to stay in positive territory with €2.9bn of new net subscriptions last month, a modest result when compared with the average of the last two years. 

Within equities, global large-cap blend, water, ecology and income equity funds were the main beneficiaries. In terms of monthly organic growth, SEK short-term bond, agricultural commodities, USD government bond, and water funds showed the highest rates.

With gains of €6.5bn in May, funds of US government bonds were the most popular category within the fixed income universe, but bonds funds as a whole experienced the fifth-consecutive negative month and the second-worst monthly result since the start of the pandemic. RMB bond funds experienced the largest net redemptions, losing €5bn.

Morningstar: All asset classes record outflows for first time since 2019

Money market funds shed €10.5bn last month, while commodities funds suffered €1.6bn of net outflows, a result mainly attributable to precious-metal products and funds exposed to a broad basket of commodities.

Allocation funds managed to attract inflows, with €987m collected. Still, last month marked the weakest in terms of flows since August 2020. Meanwhile, alternative funds shed €328m after attracting significant inflows in April. 

BNP Paribas topped the list of the asset-gatherers by branding name, followed by iShares and UBS, while Aviva, BlackRock, and Lantern Structured Asset Management suffered the biggest redemptions. 

Focused SICAV US Treasury Bond USD was the top seller of the month, excluding monetary products, while Aviva Investors Sterling Government Liquidity Fund experienced the largest net outflows.