Investors demand for UCITS drops 4.5%

Investor demand for UCTIS dropped sharply by 4.5% in Q1 of 2022, according to data by the European Fund and Asset Management Association (EFAMA).

UCITS registered net outflows of €90bn for the first quarter of this year, compared to net inflows of €238bn in Q4 of 2021.

While UCITS equity funds continued to record net inflows of €24bn, compared to €57bn in the first quarter of 2021, UCITS bond funds and MMFs recorded large net outflows of €50bn and €119bn respectively.

Meanwhile, UCITS multi-asset funds saw robust net sales of €56bn, slightly higher than its net sales of €50bn in the final quarter of last year.

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EFAMA recorded that net outflows from AIFs increased for the quarter to €19bn, much higher than the figures seen in Q4 of last year at only €5bn.

AIF equity funds saw net outflows of €42bn. AIF bond funds recorded net inflows of €bn in comparison to AIF MMFs which saw small net outflows of €5bn for the quarter.

EFAMA stated that European households' net purchases of investment funds stayed at a high level of €52bn in Q4 in 2021 to bring the total for the year to €245bn in 2021.

Bernard Delbecque, senior director for economics and research at EFAMA, commented: "Unsurprisingly, investor demand for UCITS dropped sharply in the first quarter of 2022 due to the combination of several factors: the war in Ukraine, the lockdown in China, the rise in inflation, and the lack of positive signals from policymakers, as central banks have no choice but to raise interest rates and the leeway for governments to provide fiscal support is now severely constrained by large budget deficits."

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