In February 2021, mutual fund flows in Europe continued to be sustained close to the January level. The context was mixed: higher equity markets on economic recovery & monetary policy expectations while inflation concerns drew bond prices lower. Total flows reached β¬87bn which is close to December’s record high of β¬102bn (Source: Morningstar Feb 2021).
Active funds continued to dominate the flows in February with nearly 78% of inflows. Yet passive fund flows showed a more favorable momentum up 8% at β¬19bn vs a decline of 4% for active funds at β¬68bn compared to January 2021.
Equity flows were down 7% in February. Active equity fund flows dominate but is down 10% vs January 2021 at β¬36bn. This is still more than twice their one-year average of β¬14bn. Passive equity fund flows are up 4% β¬11bn. They are above their one-year average of β¬8bn.
In the fixed income space, active flows dominated but are down 18% at β¬18bn. Passive flows were up 16% at β¬8bn, worth noticing in a negative backdrop of rising interest rates.
πWhen analyzing active and passive funds, independence is the key to give a fair view from both side.
Marlene Hassine Konqui