The current situation of the mutual funds market is reminiscent of times before the financial crisis and it seems to be emerging as a reliable investment option.
The total number of mutual funds has soared from 10.9 billion euros in December 2022 to 20.1 billion euros in September 2024. This translates into capital inflows worth 9.2 billion euros (+84% the percentage change) within the last 20 months.
The wider environment plays a key role in these highly impressive performances. While bank deposit rates remain at low levels, investors are looking for alternative ways to secure satisfactory returns with relatively low risk.
Especially at a time when central banks are starting to change their monetary policy (cutting interest rates) and geopolitical/political uncertainties are “fueling” equity volatility. It is no coincidence that the value of mutual funds is the highest since 2007.
And the most important thing is that this trend is very likely to continue in the next period of time, as the reduced risk combined with the stable returns are the main asset of mutual funds.
