Record outflow from funds in 2008

According to the EPFR Global, which deals since 1995 in collecting and providing data on the asset management market in the world, investors in 2008 have removed some 320 billion from mutual funds (excluding money market products), a record in absolute terms and in terms of percentage of assets managed, in one of the largest movements of flight to quality that the industry has ever seen. The year 2007 was concluded with positive net inflows.

Other than losses for redemptions above you must also consider the disappointing performance, especially on equity. The result of potential outflows, however, is underestimated by the fact that many hedge funds during the year have suspended or limited / slowed operations redemptions. Perhaps questionable decision, but also permitted (at least in most cases) to the meaning of regulation.

Many of the redemptions have been fed in the type of monetary funds, whose total assets under management reached a record level, $ 3720 billion. Yet even this type of funds has not been immune from the crisis, especially for the exhibition more or less directly to the world of residential mortgages, even subprimes. In terms of performance, in addition, often the numbers were extremely low, sometimes close to zero, both for investors for the same management company.

The trend of net outflows seems being slowed down, indeed, in the final weeks of the year, is being reversed: the equity funds, which closed 2008 with outflows totaling $ 233.5 billions (see chart below), in December saw positive flows of $ 32 billions, while monthly outflows from fixed income funds were limited to 3.5 billion, less than in previous months. The figures include both retail investors than institutional, excluding money funds.


Certainly the results of a single month can not be considered conclusive for the development of a new trend, but it is a signal that I think potentially favorable for stabilizing the equity markets: investors, including institutionals, are perhaps beginning to accumulate positions on equity, based on fundamentals of medium to long term, rather than on technical or short term reasons, and in the (usual) hope that the worst is now behind us.



Original post: Deflusso record dai fondi nel 2008