Net assets of worldwide investment funds experienced a marginal decrease of 0.2% at €64.33 trillion in Q3 2023, according to data from the European Fund and Asset Management Association (Efama).
However, the picture in US dollar terms was less optimistic, with a 2.7% decline to USD 68.1 trillion. The two major fund markets, the US and Europe witnessed decreases of 2.3% and 0.6%, respectively, when measured in their local currencies.
Despite the overall decline in net assets, global long-term funds managed to maintain positivity in the third quarter. Net inflows were recorded at €98 billion, a drop from €180 billion in the previous quarter. The Asia-Pacific region emerged as a standout performer, experiencing the highest net inflows of €115 billion.
In contrast, the US and Europe saw more modest net sales of €10 billion and €3 billion, respectively. Notably, worldwide equity funds showed a turnaround, recording net inflows of €59 billion after experiencing net outflows of €30 billion in Q2 2023. China and Japan reported net sales of €37 billion each, with Ireland following closely at €28 billion. In contrast, the majority of net outflows were observed in Luxembourg (€21 billion) and the US (€1 billion).
Bond funds, on the other hand, saw a decline in net inflows from €209 billion to €98 billion. Multi-asset funds continued to face challenges, recording net outflows of €85 billion, primarily driven by the US with €35 billion in outflows.
Despite a slight dip from the previous quarter, MMFs in Europe surged with net inflows of €39 billion, compared to €9 billion in Q2 2023. Similarly, the US continued to favour MMFs, with net inflows rising from €183 billion to €206 billion. However, China experienced a notable shift, transitioning from net inflows of €67 billion in Q2 2023 to net outflows of €11 billion in the third quarter.
Bernard Delbecque, senior director for economics and research, Efama, commented: “Net sales of long-term funds remained positive in Q3 2023, mainly thanks to strong net inflows into equity funds in China and Japan. On the other hand, investors in the US and Europe took a more conservative approach, mostly favouring money market funds and bond funds.”
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