๐Ÿ‘€ Looking beneath the surface: What is the impact of the Covid 19 on worldwide mutual fund flows?

26 July 2021

๐ˆ๐ง ๐„๐ฎ๐ซ๐จ๐ฉ๐ž, after a strong 2020, active funds continue to dominate the flows in H1 2021 with more than 75% of inflows. Active equity fund flows continue to be the big winners in this period of pandemic at โ‚ฌ170bn, above the level of the whole 2020 (โ‚ฌ119bn) and at a five-year record high. Worth noticing, active equity ESG flows represent 60% of active equity flows. And non-ESG active fund flows have also been multiplied by 3 vs 2020 to reach โ‚ฌ71bn. In Europe, the pandemic has triggered a renewal of interest for active strategies not only for ESG but also traditional.

๐ˆ๐ง ๐ญ๐ก๐ž ๐”๐’, active strategies ex-US equities are also benefiting from the new environment with positive flows of โ‚ฌ34bn in H1 2021 vs outflows of โ‚ฌ85bn in 2020. Yet this is hidden in total US fund flows due to the continuous, although decreasing outflows from US equity active funds of โ‚ฌ75bn vs โ‚ฌ202bn in 2020.

๐–๐จ๐ซ๐ฅ๐๐ฐ๐ข๐๐ž, in H1 2021, active fund flows are above those of passive at โ‚ฌ711bn vs โ‚ฌ558bn for the first time since 2015. They have also nearly reached their 10-year record high of 2017 (โ‚ฌ724bn). Passive funds on their side at โ‚ฌ558bn are already close to the level of the whole 2020 of โ‚ฌ566bn. Yet they are below the record high level of 2017 of โ‚ฌ859bn.

๐Ÿ‘‰Fair to say that 2021 should be a year of record for worldwide fund flows as they are already on their way to overtake the 2017 record. But what is less obvious in investors' minds is that it should concern not only passive funds but also active funds.

๐“๐ก๐ข๐ฌ ๐œ๐จ๐ง๐Ÿ๐ข๐ซ๐ฆ๐ฌ ๐จ๐ฎ๐ซ ๐ฏ๐ข๐ž๐ฐ ๐ญ๐ก๐š๐ญ ๐›๐จ๐ญ๐ก ๐š๐œ๐ญ๐ข๐ฏ๐ž ๐š๐ง๐ ๐ฉ๐š๐ฌ๐ฌ๐ข๐ฏ๐ž ๐Ÿ๐ฎ๐ง๐๐ฌ ๐ก๐š๐ฏ๐ž ๐š ๐๐ข๐ฌ๐ญ๐ข๐ง๐œ๐ญ ๐ซ๐จ๐ฅ๐ž ๐ญ๐จ ๐ฉ๐ฅ๐š๐ฒ ๐ข๐ง ๐ฉ๐จ๐ซ๐ญ๐Ÿ๐จ๐ฅ๐ข๐จ๐ฌ.

Marlene Hassine Konqui