The Franklin Upper Tier Floating Rate, Templeton Global Bond and Templeton Global Total Return funds contributed to the group’s €869m outflows in the first year of the month.
The losses were in contrast to the wider asset class; bond funds took in the most assets in January, with €16.86bn.
Outflows from the US-based fund group’s fixed income funds have been unstemmed since January 2015, totalling €31.4bn, of which €26.3bn came out of Templeton Global Bond and Templeton Global Total Return.
On the flipside, M&G’s Optimal Income saw a turnaround in its fortunes.
Richard Woolnough’s fund was “caught off guard by bond yields tanking even more in the wake of the European Central Bank’ s quantitative easing programme, which kicked in in the first quarter of 2015,” Ali Masarwah, director of EMEA editorial research at the ratings agency, said.
Masarwah added that following two years of huge outflows, the silver-rated fund saw inflows of €453m in January.
“The fund’s short duration served investors well when yields rose sharply in the fourth quarter of 2016.”
Standard Life Investments (SLI) followed Franklin Templeton in the league table outflows, with €682m – €677m of which was solely from SLI Global Absolute Return Strategies (GARS).
Masarwah said: “Among the largest Europe-domiciled open-end funds, outflows from the UK-domiciled version of Standard Life Investment’s Global Absolute Return Strategy stood out in January after redemptions of €684m in December 2016.
“The fund’s assets under management peaked at €38bn in November 2015 but have come down significantly to €29.3bn as at the end of January.
“This seemingly precarious fall, however, is not the result of huge outflows but largely reflects a euro-centric view and mainly goes back to the depreciating pound sterling in 2016; thus, it did not affect UK investors in a substantial manner.”
Morningstar said January seemed to reflect the reflation trade, as long-term funds posted their highest monthly inflows since July 2015.
