COVID-19 Crushes Mutual Funds
Fund flows are responding in surprising ways to the highest recorded volatility in the history of financial markets and the associated stock market crash.
#covid19 has caused massive outflows from mutual funds according to our latest Fund Flow Index. Bonds were the worst hit, while passive funds saw significant inflows #coronavirus #funds #markets VIEW: https://t.co/iRatXj2xs9 pic.twitter.com/Xp2WCxFDTD
— Calastone (@CalastoneLtd) April 6, 2020
In a month of superlatives, overall, UK-based funds have seen the largest outflows on record for any month by a long shot, the most week-to-week volatility, and the biggest divergence between the appetite for different asset types on Calastone’s record.
The FFI: All Assets dropped to a record low of 47.2 (a reading of 50 means buys equal sells).
Key highlights from this month’s FFI:
- March saw record fund outflows, record flow volatility week-to-week and record divergence between flows from one asset type to another
- Record fixed income outflows on concerns over credit quality in sovereign and corporate debt markets
- Equity outflows were astonishingly small for a month of such market turmoil
- Passive funds saw record inflows, while active funds saw near record outflows
- UK equity funds were big winners enjoying second-largest inflows in four years
- European equity funds were biggest losers
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