Industry Updates

Swiss fund market: market distortions cause volume to shrink

Thursday, July 14, 2022

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Opalesque Industry Update - The Swiss fund market suffered a significant decline in volume due to market distortions in the first half of 2022. The Ukraine war, inflation, and tighter monetary policy also prompted investors to withdraw money. Although individual asset classes recorded some inflows of money, these remained weak throughout the first half of 2022. In contrast, the sustainability sector recorded almost CH 11 billion in new money inflows.

The Swiss fund market shrank in the first half of 2022 from CHF 1,516,884 million (end 2021) to CHF 1,333,862 million. This corresponds to a decline of 12 percent. Investors withdrew around CHF 4 billion net from investment funds by the end of June 2022, with redemptions accelerating in the second quarter of 2022. The largest outflows experienced bond funds with CHF 5.9 billion and money market funds with CHF 2.2 billion. Net inflows were mainly experienced by mixed-asset funds with CHF 4.4 billion as well as equity funds (CHF 643 million) and real estate funds (CHF 176 million).

The slump in the stock markets had a significantly greater impact on the total volume decline of CHF 183 billion. Accordingly, the decline was concentrated on equity funds, which lost CHF 132 billion or 18.3 percent over the reporting period. However, bond funds also recorded a decline of 10 per cent or CHF 43 billion.

"As in the global financial markets, the war in Ukraine, as well as the monetary policy caesura in the wake of rising inflation rates, have also left clear traces in the Swiss fund market," says Adrian Schatzmann, CEO of the Asset Management Association Switzerland (AMAS). "At the same time, the Swiss fund market proved its fundamental stability even in phases of highest uncertainty."

Source: am-switzerland.ch