The European fund industry staged a dramatic recovery in 2009, with total sales of €190 billion (around $260 billion) for the year, boosted by extremely low yields on risk-free assets and a six month rally in equity markets, says Lipper FMI.

In a reversal of 2008’s fortunes, when the industry saw net redemptions of €298 billion, or €389 billion excluding money market funds, full-year sales were €190 billion for 2009, with money market funds in the red by €35 billion. The fund research group said redemptions in December - with an expected outflow in France for cyclical reasons, had a slight depressing impact on total sales for the whole year. 

While the industry was heavily reliant on money market funds in 2008, it was equity and bond funds that were the best sellers last year. Overall sales for equity funds were €112 billion – nearly the same amount that was redeemed from these funds in the previous year – while bond funds clocked up €86 billion of sales.

However, the best sector for the year in terms of net sales was corporate grade investment bonds, which at €36 billion accounted for nearly half of all bonds fund net sales, followed by global equities, with net sales of just under €20 billion, and emerging market equities, with net sales of €17 billion.