Long-term funds domiciled in Europe had their worst year in 2022 in term of flows since 2008, shedding €130bn (£114bn).

However December marked the continuation of a two-month positive trend with €27bn (£24bn) of net inflows.

The figures have been published by Morningstar as part of its European Asset Flows data for December 2022.   

The situation was reversed for money market funds which attracted EUR €73bn (£64bn) in 2022, about five times higher than in 2021. In the fourth quarter alone they were showered with €183bn (£161bn).

With €28bn (£25bn) of net redemptions, equity funds had their worst year in terms of flows since 2011. In the last quarter, however, equity products were able to cash in €9bn (£8bn).

Fixed-income funds lost €84bn (£74bn) in net redemptions last year, the worst result since 2008. But the fourth quarter was positive, with €19bn (£17bn) of net inflows.

With €12bn (£11bn) of net inflows, global large-cap blend equity funds were the most sought-after products in December for the second month in a row.

Turning to fund houses, Mercer Global Investments topped the list of asset-gatherers in December, followed by iShares and Sjunde AP. iShares topped the list for the full year and managed to collect more than €44bn (£39bn) of fresh money in 2022.

Assets in long-term funds domiciled in Europe fell to €10.348trn (£9.08trn) at the end of December 2022, down from €10.751trn (£9.43trn) at the end of the previous month.

Valerio Baselli, senior international editor, Morningstar, said: “The year 2022 was not an average one for investors: The inflationary spike, central banks pushing interest rates to the highest levels in almost 15 years, concrete fears of a recession, the Russian invasion of Ukraine, and the energy crises depressed investors’ sentiments during the year, dragging down both equities’ and bonds’ performances.”

Global stocks lost about a fifth of their value during the last year, he said. “Through the year, it was the second and especially the third quarters that pushed down the overall result while the first quarter was mildly positive.”