Investment in European long-term funds reached an all-time high last month at €4.44 trillion, Morningstar’s latest European asset flows data found.

This represents the highest level of investment in European long-term funds since 2007 when Morningstar started recording industry-level flow data.

Investment in European long-term open-end mutual funds, however, plummeted by €12.01bn to a net €35.09bn last month – down from January’s record-breaking inflows of €47.1bn.

In addition, inflows into bond funds reached €11.46bn compared to €9.24bn for equity funds. But among equity funds, allocation funds accrued the most investor assets, reaching €9.91bn last month.

The data also showed that global emerging-markets equity funds gathered the highest monthly inflows into any equity category, despite that their inflows of €1.46 billion were notably less than in any one-month period since August 2012. However, corporate bond funds continued to suffer outflows in February with EUR-, USD- and GBP-focused corporate bond funds posted redemptions in February, as did GBP diversified bond funds.

New Italian mixed asset fund Gestielle Cedola Piu, which took in €1.28bn during its initial subscription period, and Templeton Global Return, with inflows of €1.28 billion were among the funds with the largest inflows for the month.

Morningstar European research team member Ali Masarwah said: “Investors seem to have embraced risky assets amidst current market conditions. Equity markets remain buoyant and bond markets complacent, and investors have seemingly viewed bad news like the Italian election stalemate as a temporary setback on the one hand, or a buying opportunity on the other. This state of affairs is reflected in rising fund volumes: as of the end of February, assets under management for European long-term funds were at an all-time high since Morningstar began keeping record.”

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