Investors favour Europe but not the euro zone as inflows flow elsewhere

what happened

Investors are buying European shares, but selectively, and most of the money is going to markets outside the euro zone. According to LSEG/Lipper data, non-euro zone countries have attracted $8.29 billion so far this year, while the region's largest euro zone markets recorded a net outflow of $2.17 billion.

October has brought some improvement for the euro zone: flows into Germany turned positive for the first time since February, and Italy is heading for a fourth straight month of inflows. Still, the euro zone group is on track for a net outflow of $372 million this month, while UK, Swiss and Scandinavian equities drew close to $1.7 billion in net inflows. French equities are the outlier, with a projected net outflow of $138.5 million this month, which would be a 16th consecutive monthly outflow.

why it matters

The gap in flows suggests investors are picking individual countries and sectors rather than betting on the region as a whole. For those tracking European indices, it signals uneven demand within Europe.

market impact

European equities: money shifts from the euro zone to non-euro markets, adding pressure on France

instruments