European investors continued to invest new money in mutual funds in November 2012, adding €27.6 billion (around $36.6 billion) during the month. This brings total net inflows for open-ended funds (excluding money market funds) to €174.6 billion for the year to date.

Analysis by Morningstar shows that bond fund inflows reached €19.9 billion, making November 2012 the second-best month on record for this asset class. Investors continued to show an appetite for yield, “piling into” global emerging-markets and high-yield bond funds, the firm said.

Interest in equities picked up during the month; global emerging-markets, Asia-Pacific ex-Japan and global large-cap value funds all attracted strong inflows, while Germany and UK equity funds were among the least-loved categories. Morningstar points out, however, that although emerging markets might be expected to produce higher returns in future, eurozone equities have delivered the better performance. For the year to the end of November, funds in Morningstar’s eurozone large-cap equity category gained 16.6 per cent while emerging-markets equity rose by just 11.7 per cent on average.

“Although interest in equity funds picked up in November, equity funds have had a bleak year, marked by outflows of €11 billion… However, year-to-date outflows are nowhere near the levels seen during the sell-offs of 2011 and 2008,” said Ali Masarwah from Morningstar’s European research team.