Equity mutual funds, 2.4m-euro net inflows

In May, mutual funds with placements in equity posted net inflows worth 2.4 million euros (8.4 million RON), despite considerable declines that these funds coped with during corrections on the Stock Exchange.
Equity funds last month had subscriptions of 2.75 million euros, while repurchases amounted to 1.08 million euros, according to data published by UNOPC. Diversified funds registered subscriptions worth 1.6 million euros, while repurchases stood at 0.88 million euros.
Investors took advantage of the significant drops in equity and diversified funds, which were seriously hurt by declines on the Stock Exchange, especially on the SIF segment.
Equity funds in the first five months saw an average decrease in fund units by 5%, while diversified ones lost 2.1% on average.
“The high volatility registered lately by neighbouring equity markets, as well as a series of negative reports about the Romanian Stock Exchange, were the main factors that brought about the toughest period for the domestic market and the entire capital market for the last 5-6 years. For these reasons and because of the shortage of alternative investment instruments to the equity market, the performance of funds has been below expectations in May, and since the beginning of the year,” reads the monthly report by UNOPC.
Capital inflows by investors could not make up for the asset declines triggered by corrections on the Stock Exchange, with mutual funds posting an average decrease in the value of assets by almost 4% in May, for the first time since the beginning of the year.
The total value of mutual funds’ net assets in late May stood at 130.8 million euros. Since the beginning of the year, though, mutual funds’ assets surged by approximately 42%, with growth being sustained by fresh investments from investors, as well as the launch of new funds onto the market. Net capital inflows in mutual funds since the beginning of the year have amounted to around 18 million euros, with the number of investors rising by almost 5.5%, getting close to 75,000.
This trend shows that, despite the unfavourable conditions registered lately, investors are still interested in mutual funds, especially in those with placements on the Stock Exchange, which have proven over recent years they have the potential to offer higher yields than those of banking deposits.