For the first time in a year, the collective investment market faced a net outflow of funds from retail mutual funds

For the first time in a year, the collective investment market faced a net outflow of funds from retail mutual funds. At the end of January, it amounted to 7.8 billion rubles, the maximum result since April 2022. The seasonal factor in the form of the long New Year holidays was influenced by the situation in bank rates. Investors continued to pour money into money market funds, but profit-taking began in this segment as well, which can only intensify as the Bank of Russia softens its policies.

In January, for the first time in a year, the volume of funds raised in retail mutual funds was less than those withdrawn. According to Investfunds, the net outflow from retail funds amounted to almost 7.8 billion rubles. The last time a net outflow of funds was observed was in January 2023, but much less – about 2.2 million rubles. The losses of the past month are the highest since the spring of 2022, but against the backdrop of the influx of recent months they look small. In the previous 11 months, shareholders invested over 213 billion rubles in mutual funds, and more than 63 billion rubles were invested in December alone.

December is the hottest month of the year, when many Russians actively place savings, after which activity declines. In addition, in January, the fourth part of the month falls on official holidays and weekends, when banks and management companies do not work. According to Kommersant’s estimates, over the past ten years, December has seen peak attractions seven times, while in the next month attractions fell by 15–50%, or outflows predominated in the current and last year.

Market participants note not only a general decrease in demand for investment products, but also an increase in the number of repayments. Zokir Zokirov, head of sales development in the retail network of the Era of Investments Management Company, said that the volume of unit redemptions last month increased by 38% compared to the same period last year. High deposit rates have a strong impact on the slowdown in fund sales. In January 2024, the average maximum rate of the largest banks approached 15% per annum. “Many want to fix a high rate, realizing that in the future a cycle of monetary policy easing may begin,” notes Mr. Zokirov.

The increase in outflows is also facilitated by the unblocking of the liquid part of mutual funds, operations on which were suspended in the spring of 2022. General Director of Management Company “Pervaya” Andrey Bershadsky said that about 30 billion rubles have been unlocked to date. “Naturally, some investors chose to withdraw their funds (in January, the net outflow from the company’s funds amounted to 10.8 billion rubles— “Kommersant”),” notes Mr. Bershadsky.

At the same time, the investment preferences of private shareholders did not undergo noticeable changes – as in December, outflows continued from both the riskiest categories of funds (13.8 billion rubles) and from conservative ones (3.2 billion rubles). At the same time, inflows into money market funds continued (RUB 8.7 billion), although they were lower than at the end of 2023.

In particular, in the largest mutual fund Liquidity (under the management of VIM Investments) in January, the net inflow amounted to 5 billion rubles. Meanwhile, in December last year, the inflow amounted to 34.5 billion rubles, with almost half of the amount on the last working day of 2023. “Clients are objectively interested in seeing their money work. From here you can see an abnormal influx in late December before the long weekend. Therefore, the January results should not be considered as a trend – this is a natural outflow of funds invested in the fund before the holidays,” noted VIM Investments Management Company.

The further situation on the market will be determined by expectations of a reduction in the key rate by the Central Bank following a decrease in inflation. Analysts assume the first reduction already in the second quarter. As noted by the head of the asset management department of Alfa Capital Management Company, Viktor Bark, these expectations will have a positive effect on the stock and bond markets. At the same time, money market funds will become less attractive. “Money market funds act as a buffer that accumulates free liquidity during periods of tough Central Bank policy and releases it after a change in rate dynamics,” notes Mr. Bark. “Therefore, they should give additional impetus to the growth of stock and bond prices.”

Vitaly Gaidaev