But fears of how the Volkswagen emissions scandal would affect German companies led European flows to favor Italian and Dutch equity funds towards the end of the third quarter, BNP Paribas noted, citing EPFR.
European investment grade, as well as junk-rated credit, saw bigger losses of $824 million and $617 million respectively in the third quarter, partly as a result of these problems.
Shunning Bonds And Emerging Markets
Fears for China's economy deepened over the quarter as the country suffered a huge equity plunge and devalued its currency, while economic data in most emerging markets confirmed fears of a protracted growth slowdown across the developing world.
While the U.S. Federal Reserve held off raising interest rates in September it could move in December, despite the increasingly fragile outlook for world growth, especially in China and emerging economies.
Bond funds of all stripes saw outflows in the third quarter. Global bond funds lost $16.9 billion while U.S. and European debt shed $8.9 billion and $2.8 billion respectively.
"During a quarter marked by a sharp correction in China's equity markets and persistent fear that the (Fed) would make good on its stated desire to start normalizing interest rates investors steered clear of most fixed income fund groups," the report said.
Bond funds lost $7.4 billion in the past week, the biggest outflow in five weeks, the BofA note said.
Meanwhile risk-shy investors pumped around $100 billion from global and European money market funds over the quarter, EPFR said.
Emerging equities and bonds extended their run of losses on signs the developing world is headed for a protracted period of weakness or even crisis in the case of China and Brazil.