Flows into small-cap funds sold in Europe stand at the highest level on record in 2013, as investors allocated less to developed market large-cap funds while seeking alternative ways to maintain equity risk outside of emerging markets.

In the first three quarters of 2013, flows into European mutual funds and exchange-traded funds which invest in smaller companies stood at €15.5 billion - higher than in any full-year period on record, according to figures from Barings and Lipper Fund File published today in the Barings' European Industry Trends report. The figures only include inflows into funds that are sold in Europe.