The European Fund and Asset Management Association (EFAMA) has published its International Quarterly Statistical Release regarding the developments in the worldwide investment fund industry during the first quarter of 2023.
Bernard Delbecque, Senior Director for Economics and Research, says: “Following one of their worst years in history, bond funds enjoyed a strong rebound in net sales and net assets in Q1 2023, as investors took advantage of the relatively high level of interest rates and bond yields, which significantly reduced the risk of further falls in bond prices.”
The main developments through Q1 2023 are as follows:
- Net assets of worldwide investment funds increased by 3 per cent in Euro terms.
- Net assets of worldwide investment funds reached EUR62.42 trillion in Q1 2023. Measured in US dollar terms, the net assets rose to USD67.9 trillion at the end of Q1 2023, a 5 per cent growth compared to the previous quarter.
- Measured in local currency, net assets in the two largest fund markets, the United States and Europe, increased by 5.9 per cent and 2.6 per cent, respectively.
Net investment fund assets increased both in Europe and the United States thanks to a combination of net inflows and the overall positive performance of financial markets.
- Net sales of long-term funds shifted back into positive territory in Q1 2023.
- Worldwide long-term funds recorded net inflows of EUR132 billion, compared to net outflows of EUR198 billion in Q4 2022. Europe experienced the highest net inflows of EUR73 billion, followed by the United States with EUR55 billion, and the Asia-Pacific region with EUR13 billion.
- Global equity funds saw a turnaround with net inflows of EUR4 billion, compared to net outflows of EUR51 billion in Q4 2022. Japan and Ireland registered the highest net sales (EUR22 billion and EUR19 billion, respectively), whereas the bulk of net outflows occurred in the United States (EUR39 billion).
- Bond funds recovered as well, with net inflows of EUR136 billion, compared to net outflows of EUR121 billion in Q4 2022. The United States and Europe accounted for the majority of net sales, EUR95 billion and EUR52 billion, respectively.
- Multi-asset funds sustained net outflows of EUR45 billion, marking the fourth consecutive quarter of negative net sales. China accounted for most of these net outflows (EUR18 billion).
Long-term funds experienced a positive shift in net sales, driven by strong performance in bond funds.
- Global money market funds rose to a record not seen since Q1 2020.
- Worldwide money market funds (MMFs) recorded net inflows of EUR 534 billion, up from EUR 325 billion in Q4 2022.
- In Europe net inflows of MMFs declined to EUR11 billion in Q1 2023, compared to EUR170 billion in Q4 2022.
- MMFs in the United States attracted very high net inflows (EUR432 billion), a substantial increase from EUR183 billion in Q4 2022, as many investors shifted their money from bank deposits to MMFs in reaction to the Silicon Valley Bank’s collapse.
- In China, MMFs registered net inflows of EUR68 billion, compared to net outflows of EUR34 billion in Q4 2022.
Net sales of worldwide MMFs were very high in Q1 2023, primarily due to unusually strong net inflows in the United States.
