European investors have shunned equity funds and switched to bond and money-market funds so far this year, according to new research from Schroder Salomon Smith Barney.

The firm's latest report on European funds flows shows that demand for European equity funds from retail investors hit an 18-month low in January, with just $5.3bn (€5.82bn) of net inflows. This is 40% lower than the $9bn of monthly inflows in the last few months of 2000.