Net inflows of EU long-term funds robust in Q3 2020
Net assets of UCITS and AIFs grew by 2.8% (amounting to €17.58trn) in the third quarter (Q3) or 2020, broadly in line with global equity and bond markets. UCITS net assets grew by 3.1% while AIFs increased by 2.4% during this period. By the end of September this year, net assets of UCITS and AIFs were smaller than at the end of 2019, due to the markets’ steep drop in March 2020, following the Covid-19 outbreak globally.
UCITS and AIFS attracted €195bn of net inflows in Q3 2020. Net sales of UCITS stood at €145bn, compared to €272bn in Q2 2020, while AIFs attracted €51bn in net new money over the quarter (up from €12bn in Q2 2020).
While net inflows remained robust in all categories of long-term funds, net sales of bond and other funds in Q3 declined slightly compared to the previous quarter. Net inflows into equity funds increased, with investors optimistic about financial markets outlook. Money market funds (MMFs) recorded a sharp decline in net sales, from €136bn in Q2 2020 to €41bn this quarter, indicating a degree of caution during a time of financial uncertainty.
After dumping a net amount of €88bn of investment funds in Q1 2020, European investors returned to the market to purchase net €144bn in the second quarter. All types of investors increased their funds purchases, including households who invested a net amount of €32bn in Q2 2020 – a record not seen since Q2 2017, according to EFAMA.