Although geopolitical tensions across Europe provoked investor jitters, the region's net fund sales reached the second highest level ever, according to research firm Lipper.

Net sales for European funds rocketed by 95 per cent year-on-year to €367 billion in 2014, according to Lipper's 2014 review of the European funds industry.

Europe's strong sales performance, which fell just shy of the €372 billion record in 2006, was largely thanks to cross-border funds, which contributed €179 billion. 

It was Italy that came out on top, accounting for £47 billion of European flows, followed by Germany (€20.9 billion) and Spain (€20.3 billion). The UK fell to sixth place towards the end of the year after “an anaemic last quarter”, the research firm said.
 
As tensions in Europe prevailed, including Greece's mounting debt burden and the Russia-Ukraine conflict, investors sought to diversify their portfolios and multi-asset investing made headway. Mixed-asset funds generated net inflows of €125 billion as commodity funds suffered net outflows of €2.2 billion over the course of the year.

Worth noting however was the dip registered in new mixed-asset fund launches over 2014, which was down for the first time in four years, indicating the trend may well be hovering at its peak.

As investors leaned towards larger-cap “safe-haven” equities in the US and Europe, broad-based European corporate bond funds also took in around €58 billion.

Meanwhile, in spite of ongoing fears of interest rate hikes, bond funds enjoyed their seventh consecutive year of growth, bringing in net flows of €164 billion in 2014 and outshining equities, which mustered only €60 billion from investors.