Concerns about global economic growth dominated markets in the first half of the month, with global stock markets down 11%. And, although markets recovered most of their losses in the latter parts of February, many investors remain concerned.
As a result, Morningstar said, at an overall level, equity funds reported outflows of €7.3bn during the month, led by large cap equity funds in Japan and US large-cap growth equities.
It was, however, a similar story in the fixed income space, however, the leaders in terms of outflows were the global bond and euro corporate bond sectors.
“Altogether, outflows from long-term fixed-income funds reached €8.6bn, leading the total net flows out of European long-term funds to €16.8bn in February.
There was, however, a significant difference between the flows into index and non-index funds, the firm said, driven by the high levels of volatility.
“Over the past 12 months, index funds’ total monthly net flows seemed to bear very little relationship to market developments, whereas non-index flows mirrored short-term market movements. This may indicate that index funds are seeing a constant flow of assets from investors who do not see reason to withdraw assets from them based on short-term market moves,” Morningstar said.
During the month, open-ended index funds saw inflows of €4.4bn, while index-tracking ETFs (which are not included in the numbers of this report) added another €2.4bn of inflows.
Non-index funds saw €21.3bn in outflows by comparison.
