With the profound impacts of Covid-19 continuing to reverberate around the world, it is notable how robust the funds industry has been during the last six months. In Ireland, like elsewhere, significant redemptions were registered in March as investors sought to reduce risk and increase liquidity.
With the profound impacts of Covid-19 continuing to reverberate around the world, it is notable how robust the funds industry has been during the last six months. In Ireland, like elsewhere, significant redemptions were registered in March as investors sought to reduce risk and increase liquidity.
Since then, however, a strong and consistent return of net inflows into Irish domiciled funds has led to positive net sales for the first half of 2020 of some EUR80 billion and total net assets broadly in line with the beginning of the year.
These numbers of course do not tell the full underlying story – one of extreme market volatility and market disruption, particularly with trading in short term securities during the early days of the pandemic. Some of the reasons behind this and the subsequent resilience of investment funds are touched upon later.
As we return from an unusual summer, a typically full line up of issues are laid out for the remainder of the year and beyond. Brexit negotiations continue between the EU and the UK, with no outcome yet on a trade agreement or equivalence in financial services; ESMA have sought to introduce an additional layer to the European Commission review of AIFMD; Sustainable Finance remains a primary objective for both industry and policy setters; while here in Ireland we await the findings from the Central Bank of Ireland’s review into the application of the CP86 (fund management company guidance) regime.
As greater clarity emerges on these and other issues over the coming weeks and months, one thing remains consistent, the funds industry continues to provide positive outcomes for the savings objectives of citizens, while providing financing to business and communities in a regulated, sustainable manner. We must remain collectively focussed on this as we play our part in the delivery of national and regional recovery plans.
Kieran Fox, Director – Business Development, Irish Funds
“These have been a challenging few months. I’m very proud of our industry, how although we compete against each other we also look out for each other and others in society, and throughout have our investors’ best interests always at the forefront of our minds. A heartfelt thank you to the Irish Funds team and our hard working fora as we pulled together during this crisis, demonstrating our industry’s resilience, ensuring our investors’ capital continues to fund sustainable industry across the globe. I’m reminded of the Irish proverb ‘Ní neart go cur le chéile – There’s no strength without unity’.”
Lisa Kealy, Irish Funds Chairperson, Partner EY
