in May, the inflow of funds was a record, exceeding 2 billion rubles
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In May, the net inflow of funds to equity mutual funds was a record since February 2022, exceeding RUB 2 billion. Investors showed interest in these instruments against the backdrop of the continued growth of the stock market. However, taking into account the withdrawal from the most conservative money market funds, the total influx of collective investments into the market was not too large. Experts believe that interest in risky funds will continue. At the same time, many companies, including large and popular with investors, continue to refuse to pay dividends.
Interest in retail funds (open-ended and exchange-traded mutual funds) changed noticeably in May. After a month-long break, inflows resumed in the most risky category of funds, focused on investing in shares. According to Kommersant’s estimate, based on InvestFunds data, the net inflow of funds into them exceeded 2 billion rubles, which is the highest result since February 2022.
Investors were clearly encouraged by the favorable stock market conditions. In May, the Moscow Exchange index rose above 2,700 points for the first time since April last year, having added more than 3% in a month, and more than 20% in the whole spring. The positive mood on the market was supported by incoming dividends from those companies that were ready to pay them during the crisis (many large players refused dividends, see, for example, p. 9), and positive financial reports.
“A gradual shift in demand towards equity funds is expected against the backdrop of double-digit returns that they have shown since the beginning of the year,” said Konstantin Kirpichev, deputy general director for retail business and marketing at RSHB Asset Management. Andrey Rusetsky, Managing Director for Investments at PSB Management Company, speaks of an increase in demand, including for sectoral funds investing in commodity companies, and those that are focused on second-tier securities.
At the same time, the director of the asset management department of Alfa Capital Management Company Viktor Bark clarifies that “there is no steady inflow yet”: interest was focused on a narrow category of funds that provide for the payment of income. According to InvestFunds, the maximum net inflow of funds – almost 4 billion rubles – was observed in the fund “First – Equity Fund with income payment” (MC “First”). “Since the second half of 2022, we have been drawing the attention of clients to the possibility of gradually including cheaper stocks in their portfolios. An important help was the possibility of paying investment income by open-ended mutual funds,” explained Andrey Makarov, head of the sales department of the management company.
An important role in the growth of interest in funds, according to market participants, is played by agent banks, through which the main sale of financial instruments is carried out. “Against the backdrop of declining interest income, banking groups began to actively sell commission products, and primarily funds with payments or money market instruments,” notes Kommersant’s interlocutor on the market. According to Konstantin Kirpichev, the possibility of obtaining intermediate income in a situation of high market volatility and reduced planning horizons is an important competitive advantage for clients.
On the whole, in the industry, the net volume of borrowings yielded to April. According to InvestFunds, the total inflow amounted to only 2.4 billion rubles, more than half as much as in April. This result was due to the active withdrawal of shareholders from the Raiffeisen – Foreign Exchange Money Market Fund, whose clients took over 2.8 billion rubles, and its net asset value (NAV) fell from 4.76 billion to 1.84 billion rubles . The entire amount of funds was withdrawn in five days, on some days the outflows amounted to hundreds of millions of rubles. “Probably, the money was taken by wealthy clients who purchased fund units for foreign currency against the background of commissions introduced by the bank on foreign currency accounts,” notes a Kommersant interlocutor on the market. Raiffeisen Capital did not respond to Kommersant’s request.
During the summer months, inflows to equity funds may increase, market participants believe. “In the coming months, due to inertia, shares will be among the leaders in attraction, and we expect a more powerful wave of attraction at the end of the third or beginning of the fourth quarter (against the background of interim dividend payments.— “b”),” notes Andrey Rusetsky. According to Mr. Makarov, as the annual dividend season ends, there may be a shift in attention towards mixed and bond strategies.
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