(March 12, 2013) — Emerging market bonds were European investors’ sweethearts last year, with an estimated €27.6 billion in net sales flowing to the asset class, research has found.
The asset class rose to the top spot from fortieth position at the end of 2011 and beat the second place investment option by almost €3 billion in estimated net sales, according to data monitor Lipper’s annual report on the industry.
Second place went to US dollar-denominated corporate high-yield bonds, which gathered an estimated net €24.7 billion over the 12 months, taking the asset class from twentieth place in 2011.
In January, M&G Investments’ specialist bloggers the Bond Vigilantes said an index of this asset class produced just under a 30% return for investors.
Corporate paper bumped down last year’s second place finisher—asset allocation funds—to third place with €24.1 billion in estimated net sales, while last year’s winner, sterling denominated money market funds, slumped to fourteenth place with just €8.8 billion in estimated net sales.
The highest riser among top-gathering asset classes last year was euro-denominated investment grade corporate bonds. In 2011, this asset class finished in 213th place, last year—with €12.7 billion in estimated net sales, it finished thirteenth.
Also rising quickly were funds of bond funds, which rose from 190th place at the end of 2011, to fifteenth at the end of last year.
The five asset classes that saw the largest outflows were euro-denominated money market funds, UK equities, funds of hedge funds, guaranteed funds, and short-term European bonds.
Related magazine article:Is Emerging Market Debt This Year’s Junk Bond?