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Investors displayed “resilience” amid Covid turmoil, Efama says

investmentFund flow data shows investors displayed “resilience” during the Covid-19 market turmoil earlier this year, it is claimed.

The value of investment fund assets fell by nearly 11% to the equivalent of €47.1 trillion worldwide during the first quarter – but less than half a per cent was due to outflows, according to European Fund and Asset Management Association (Efama) figures.

Bernard Delbecque, Efama’s senior director for economics and research, said: “While the sharp fall in global financial markets at the end of Q1 2020 led to a large drop in net assets of worldwide investment funds, net outflows only represented 0.46% of total assets, which confirms a high degree of investor resilience in stressed market conditions”.

However, the figure includes money market funds, the usual destination for flows at a time of stress. Net money market fund sales reached around €830 billion. Equity and bond funds suffered.

Globally, regulated open-end bond funds recorded the most net outflows, equivalent to €207 billion, compared to net inflows of €233 billion in the previous quarter.

Long-term funds (which excludes money markets funds) suffered redemptions equivalent of net €213 billion globally throughout the first three months of the year, marking a change in sentiment following the €548 billion of new investment seen in the fourth quarter last year.

At a regional level, Europe accounted for €122 billion of net outflows, the second worst after the US.

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