INVESTORS withdrew over 100 million euros from funds investing in Finland in April.
Finance Finland on Monday revealed that transactions reduced the total amount of capital in such funds by 104 million euros as investors weighed up their options amid uncertainty linked to tightening monetary policy and the war waged in Ukraine by Russia.
Investors withdrew altogether 242 million euros from equity funds and 313 million euros from short-term bond funds. New investments in hedge funds amounted to 105 million euros, in long-term bond funds to 301 million euros and in alternative funds to 45 million euros.
Last month was difficult especially for bond investors, with the value of bond funds falling due to rising interest rates.
Also market developments had a negative impact on fund capital.
Mariia Somerla, an expert at Finance Finland, highlighted that the acceleration of inflation has resulted in unusually sharp increases in interest rates. Euribor 12, for example, climbed above zero for the first time in more than six years in April.
“The eurozone has long been in an era of negative market interest rates. This raises the question, will also the eurozone be completely free of negative interest rates at the end of the year?” she said.
Finance Finland reminded that key indices plunged in April. In the US, the reaction is attributable to market disappointment with the first-quarter results of several major technology companies and concern about reports that the rise in consumer prices has accelerated to 8.5 per cent. The expectation is that the monetary policy will be tightened further in an attempt to rein in inflation.
In Europe, the climate of uncertainty is being maintained by the continuing war in Ukraine.
Statistics Finland has estimated that roughly 1.3 million Finns had savings in investment funds in 2020. The median amount invested in funds was about 4,000 euros.
Aleksi Teivainen – HT