04.06.2020

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.

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

Source: Calastone

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