Weekly Fund Distribution Notes – 24 September 2025
16th October 2025
Are European investors really returning to US equity funds, as suggested by August flow data? Worth taking a closer look. Also, like always, the most important mandate, partnership and fund selector news.
Yesterday, Ignites Europe published a story headlined “European investors return to US equity funds” as net inflows for Europe-domiciled US equity funds reached EUR 6.1 billion in August, marking a reversal after suffering EUR 27.4 billion of outflows between March and July. The article cited Kenneth Lamont, principal at Morningstar, as saying that “US equity markets had rebounded to new highs, delivering returns almost double those of European equities since May. While many European investors remain cautious amid geopolitical tensions, trade frictions, and talk of an [artificial intelligence] bubble, the allure of the world’s largest market will be increasingly difficult to resist if this outperformance continues,” Lamont said.
Amin Rajan, CEO of Create-Research, added that the inflows “reflected a momentum trade while US markets are scaling fresh heights. For now, it is opportunism, rather than fundamentals, that is driving interest in US assets.” Whilst we do not necessarily disagree with the statements, we added another observation to the article: “the predominance of flows to passive products hints towards some tactical allocations ahead of the Fed meeting”. Here it must be mentioned that US ETFs collected net inflows of EUR 6.7 billion in August, whilst their active counterparts experienced net outflows of EUR 390 million. On an overall basis however, active flows beat passive again in August.
Coming back to the US, we do not observe any structural or strategic change in European investor sentiment or allocation plans towards the US. In fact, we see that global readjustments (away from the US, also considering the massive index weight) are still at a relatively early stage and will continue well into 2026. This is also confirmed by looking at current European fund buyer searches.
What’s the news on the buy-side? Up in the north, Nordea appointed Ares Capital Management to run three high-yield bond fund mandates, taking over from Aegon and MacKay Shields. In the Netherlands, APG, the country’s largest pensions manager, has handed Schroders Capital a EUR 425 million infrastructure debt mandate. In Germany, Oddo BHF launched another FoF within its Navigator range. Also in Germany, Deutsche Bank and DWS have chosen Partners Group for a new evergreen fund, which will be exclusively accessible to the banks’ qualified private banking clients in Europe. Speaking of partnerships, PGIM has teamed up with Partners Group to create hybrid portfolios in a move similar to Capital Group and KKR or L&G and Blackstone. Expect many more to come.
In this context, see also our video interview with Ignites Europe from August (Link). Some soundbites: “I think partnerships between traditional AMs and private market specialists make a lot of sense for various reasons. First of all, it’s incredibly hard for traditional asset managers to build up private market expertise on their own. Talent willing to join a traditional asset manager is relatively rare and very expensive. The same actually applies to private market shops in terms of acquisition challenges – valuations are sky high. I think there is a challenge in integration of private market people, private market firms, if acquired, into traditional asset managers. They come from a different background, from a different working culture, from a different compensation culture. The cultural shock in integration can be quite meaningful … Tier one fund buyers and large asset owners favour established private market specialists, which have really proven their worth, rather than traditional fund houses moving first time into that space.”
What else? Citywire Selector featured an interview with Chiara Mauri, head of multi-manager at Fideuram, one of Italy’s most influential fund selectors. Mauri and her 12-person team look after EUR100 billion in assets across 2,000 funds and ETFs at Fideuram – Intesa Sanpaolo Private Banking. Check it out! What’s on her radar screen currently? “We see strong value in market-neutral, global macro and flexible credit strategies – especially those that can reduce reliance on beta and provide alternative sources of return”.
