Rising inflation, the tightening of monetary policy, Russia’s invasion of Ukraine, and the resulting risks to economic growth have caused sales of investments funds defined as Undertakings for Collective Investments for Transferable Securities, or Ucits, to turn negative in the second quarter, according to the European Fund and Asset Management Association, known as Efama.
Net sales of long-term Ucits stoord at 82 billion euro in the second quarter, representing 0.7 percent of total assets, Efama said the data shows that “investors appear resilient given the exceptionally high degree of uncertainties surrounding the global economy.”
Net Ucits assets declined by 7.9 percent for the second consecutive quarter with net outflows of 98 billion, mainly due to the sharp fall in global stock markets. Long-term Ucits suffered a reversal in net sales, from net inflows of 29 billion euro in the first quarter to net outflows of 82 billion euro in second quarter.
Net outflows from Ucits bond funds increased to 63 billion euro from 50 billion in the first three months, due to rising inflation rates and the shift in the orientation of monetary policy towards higher interest rates.
Money market funds see lower outflows
Ucits equity funds recorded net outflows of 17 billion euro, for the first time since 2020, whereas net sales of Ucits multi-asset funds fell from 56 billion to close to zero. Ucits money market funds suffered much lower net outflows than in the first three months, 16 billion euro, compared to 119 billion euro.
Net assets of Alternative Investment Funds fell by 4.7 percent in the second quarter, with net outflows reaching 14 billion euro, compared to 19 billion euro in the first three months.
Efama’s data is based input from 29 European countries: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Liechtenstein, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, and United Kingdom.