Equity 16 July 2019, 1:48pm

Investors withdraw from Hungarian funds in June

Portfolio

Money has begun flowing out of Hungarian investment funds in June at an astounding rate, with HUF 179 billion leaving the sector, even though fund managers have achieved very nice returns so far this year. The biggest losers in June were bond funds, with the outgoing money presumably ending up in retail government securities, particularly the new MÁP+ bond. The total assets of investment funds fell 2.2% in June.

Following the May decline, June has been the second month this year when total assets decreased. According to the lates figures released by the Association of Hungarian Investment Fund and Asset Management Companies (BAMOSZ), Hungarian investment funds managed HUF 6,213 bn in assets at the end of June, down from HUF 6,351 bn a month earlier.

Negative sales were responsible for nearly all of the June decrease, as investors withdrew HUF 179 bn from the sector. Assets managed decreased by "just" HUF 137 bn, which means returns amounted to HUF 42 billion in June.

Assuming that all of the money withdrawn from investment funds went to MÁP+ bonds, which is far from realistic even though the new superbond has been a significant factor, some 20% of the funds pouring into MÁP+ in June originated in withdrawals from investment funds.

The biggest losers in June were bond funds (and the freshly attached ex-money market funds), which lost HUF 71.2 bn in assets managed, while the former star category, property funds, performed second worst with HUF 48.2 bn lost. In is worth noting that only closed commodity funds and capital protected funds were able to secure positive net investments in June.

As for the January-June period, net sales of the main categories remain positive this year and aside from some rearrangement between money market and bond funds, property funds are still the most popular category, slightly ahead of mixed investment funds.