Fund assets hit $70 trillion; bonds boom, stocks struggle

By Mark McSherry

Net assets of worldwide investment funds rose 3.2% to $70 trillion in Q2 of 2023, according to the European Fund and Asset Management Association (EFAMA).

In its International Quarterly Statistical Release, EFAMA said that measured in local currency, net assets in the two largest fund markets, the United States and Europe, increased by 4.3% and 2%, respectively.

Net inflows into long-term funds further strengthened in Q2 thanks to strong demand for bond funds. However, global equity funds recorded net outflows.

EFAMA Senior Director for Economics and Research Bernard Delbecque said: “After the annus horribilis of 2022, bond funds are back with net sales totaling EUR 345 billion at the global level during the first half of this year.

“Two factors can explain this recovery: first, expectations that inflation should continue to decline, which would open the door to a more stable interest rate environment and potential capital appreciation, and second, the current high level of interest rates, which gives investors the opportunity to earn decent income.”

EFAMA said worldwide long-term funds recorded net inflows in Q2 of €149 billion, compared to €123 billion in Q1 2023.

However, global equity funds recorded net outflows of €27 billion in Q2, compared to net inflows of €5 billion in Q1 2023.

Bond funds enjoyed net inflows of €208 billion, up from €137 billion in Q1 2023. The United States, China and Europe recorded the highest level of net sales, with €88 billion, €77 billion, and €44 billion, respectively.

Multi-asset funds continued to record net outflows of €80 billion. Europe accounted for most of these net outflows with €33 billion, while China and the United States also registering net outflows of €17 billion and €12 billion, respectively.

Global money market funds suffered a sharp decline in net inflows in Q2. Worldwide money market funds (MMFs) recorded net inflows of €275 billion, down from €507 billion in Q1 2023.

Europe’s MMFs experienced a decline in net inflows to €8 billion from €11 billion in Q1 2023.