Net sales of AIFs assets domiciled in Europe 2019-2023

From the third quarter of 2019 to the third quarter of 2023, Alternative Investment Funds (AIFs) primarily experienced fund inflows with a peak being reached in 2020 at a combined net fund inflow of 50.57 billion euros. Similarly to the fund flow of Undertakings for Collective Investment in Transferable Securities Directive (UCITS) in Europe, AIFs experienced a net fund inflow. Following the accumulation of funds from the majority of securities in 2023, AIFs totaled a net inflow of 6.4 billion euros. 

What is fund flow?

Fund flow is the cash that flows in and out of various financial securities. A net inflow happens when more cash flows into the AIF than out of it. This results in more cash being available for investment by fund managers. A net outflow is the result of more cash being taken out of the AIF than what is invested. During 2021, bond and equity securities were among the most popular forms of asset allocation in Europe when managing funds.

Fund flow as a metric

Fund flow displays the amount of cash that has been added or removed from a specific fund. While some metrics such as European AIF asset growth rate or return on investment (ROI) can be used to gain insight into the performance of a fund, fund flow is not reflective of the fund's performance. It may, however, be useful when trying to understand an investor's behavior. For example, if investors expect a downturn it is likely a fund outflow may occur.