July could be considered a good month if you are a Spanish football fan, an Olympic medallist or a European fixed income fund. 

New research from Morningstar found fixed income strategies raked in almost €42bn (£35bn) of net inflows in July, marking the strongest period in more than five years.

Indeed one of these proponents would have been Momentum, who told us last month they’ve topped up their allocation to bonds during their latest end-of-quarter rebalance.

Momentum binned their inflation-linked holdings in favour of their nominal equivalents, while moving further out the duration curve.

Not everybody shares that sentiment however – with Waverton recently informing us that they’re particularly cautious about bonds for two reasons: market complacency about the risk of a hard landing, and attractive government bond yields giving them confidence to sit tight and wait.

Good news for European-domiciled equities, too – but only of the passive variety. Trackers attracted €12.5bn in total, while active funds bled €2.5bn, leading to net equity inflows of 10bn. 

Morningstar’s research showed Japanese large-cap equities was the region most affected by investor concerns – withdrawing €3.3bn over the month. 

Whether Japan’s long-term corporate governance story is enough to convince allocators to stay the course remains to be seen, and we recently covered the slight jitters among DFMs when it comes to fully backing the region. 

The team at Liontrust said they’re staying constructive on the market despite the feeling among asset managers that it’s ‘the opposite of the gift that keeps on giving’. 

Asset Allocator readers will be the first to know should DFMs ever pull back from Japan en-masse.