Hungarians pour their savings into investment funds

Unprecedented events in last December

Investment funds continued to do well in December, with the Association of Hungarian Investment Fund Managers and Asset Management Companies (BAMOSZ) reporting that last month they managed assets worth nearly HUF 9,300 billion, which corresponds to an increase of almost 3% in one month and more than 18% in one year. This again represents a new record in assets under management. In recent years, the last time the sector saw a higher asset growth rate in 12 months was in 2014.

This time, the growth in wealth was driven only by the inflow of fresh money, with

nearly HUF 360 billion of fresh capital coming into investment funds, an unprecedented amount. This also means that a significant proportion of fresh savings have again opted for investment funds (mainly bond funds) rather than retail government bonds.

New record for bond funds

In December, bond funds were again the category with the most assets, with assets under management exceeding HUF 2,600 billion.

This means that real estate and mixed funds are increasingly being overtaken. Assets under management in money market funds also grew strongly last year:

Money pours into short bonds

In one month, most fresh money has repeatedly flowed into bond funds by far, but this is entirely due to short bond funds.

Such a large amount of money has virtually never been injected into bond funds in a single month,

except in January 2019, but there the money market regulation restructuring led to a one-off large inflow of money (many money market funds were converted into short bond funds).

In December, bond funds were followed by closed-end funds (which primarily manage institutional assets) and money market funds came third.

At the other end of the list, real estate funds led the way, with nearly HUF 20 billion of savings flowing out of them in December.

Bond funds were the absolute winners in terms of capital raised last year, with the category raising €978 billion in 12 months, an unprecedented amount in recent years.

Money market funds came second, with net inflows of HUF 289 billion, breaking the category's years-long downward trend in 2022.

Apart from the two categories above, only commodity and absolute return funds saw a modest inflow of assets, with all other categories ending last year in the red.

Real estate funds were the top performers

Until the end of the third quarter, commodity funds looked set to be the top performers in terms of asset returns in 2022, but their performance deteriorated in the final months, with real estate funds ending up as the best-performing asset class at 8.5%.

Absolute return funds came in second place last year with a strong performance of 6.5%, while money market funds were the third best performing category with 3.3%.

Equity funds were the worst performers last year, with a loss of more than 12%, but mixed funds also ended the year in the red.

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