Fixed Income Funds Surge Past Equities Amid Geopolitical Tensions
European fixed income funds outpaced equities in Q2 2026 as investors reassessed risk amid geopolitical tensions. According to Morningstar, European open-end funds and ETFs attracted a net €188 billion inflow, down from €203 billion in the previous quarter.
Bond funds gathered €84.1 billion, surpassing equity inflows which fell to €72.4 billion. The shift towards fixed income was driven by higher oil prices and inflation concerns, with demand for inflation-linked and emerging market bond funds increasing.
Passive strategies accounted for 75% of net inflows, while active bond funds outperformed passive counterparts in the quarter. BlackRock topped Morningstar's European fund flows league table with €36.4 billion of net inflows, largely driven by its iShares passive fund range.