Investor sentiment turned positive in the last quarter of 2022 but was not enough to stop assets under management slipping, figures from the European Fund and Asset Management Association (Efama) show.
Net assets of Ucits and alternative investment funds (AIFs) declined by 12.4% in 2022, ending the year at €19.1 trillion. Close to 90% of this decline was due to the decline in stock and bond markets, and the remaining 10% to outflows from investors.
Net assets of Ucits and AIFs dropped by 13.3 % and 10.7%, respectively, whereas net outflows from Ucits and Aifs reached €184 billion and €101 billion.
But the fourth quarter marked a turning point in flows and investor sentiment, Efama said, with Ucits and AIF net assets rebounding to rise by 0.8%. Ucits net assets increased by 1.9%, in line with the stock market recovery.
Ucits and AIFs attracted €75 billion in net inflows in Q4 2022, compared to net outflows of €138 billion in Q3 2022.
Net assets of AIFa, however, declined by 0.9% because of the decision by a large Dutch pension fund to disinvest from AIFs in favour of segregated mandates in reaction to the new IFR/IFD prudential rules.
Net sales of Ucits amounted to €128 billion, compared to net outflows of €123 billion in Q3 2022. AIFs registered net outflows of €53 billion, compared to €15 billion in Q3 2022.
Equity funds suffered the most in 2022, registering net outflows of €70 billion across the year as a direct consequence of the stock market downturn.
Despite a wave of reclassifications and downgrades over the past year, SFDR Article 9 funds registered their 7th consecutive quarter of net inflows, totalling €7.7 billion.
Bernard Delbecque, senior director for economics and research at Efama, said: “With inflation easing and Fed and ECB official interest rates approaching the highest levels observed in the past 20 years, 2023 should be a good year for bond funds.
“It is less clear how the demand for equity funds will develop in the coming months, despite a strong start, given the remaining uncertainties about the resilience of the global economy to the tightening of monetary policy and the war in Ukraine.”
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