The balance sheet of March 19: 214 thousand investors left money market funds

Political developments in the money markets have led to significant changes in investor preferences. Money market funds, in particular, have been among the investment vehicles most affected since March 19. During this period, a total net outflow of 440 billion liras was observed from the fund market.

According to BloombergHT data, money market funds experienced the largest loss with an outflow of 650 billion liras. The fund size, which was 1.44 trillion liras as of March 18, decreased by 40 percent within 10 days. While there was an outflow of 49 billion liras from debt instrument funds, hedge funds showed an increase of 236 billion liras. There was a net inflow of 58 billion liras into foreign currency funds. According to experts, this situation indicates that investors are turning toward short-term instruments.

NUMBER OF INVESTORS DECREASED

Although money market funds are generally known as products that do not carry principal risk, regulations introduced at the end of 2024 mandated a 10 percent holding of debt instruments. This made them susceptible to capital declines in the short term. The political tension experienced last week led to serious price drops and interest rate hikes in debt instruments. This caused the returns that many investors were accustomed to to fall.

According to TEFAS data, 214 thousand 485 people closed their money market funds in the last 10 days, reducing the number of investors to 3.6 million. The depreciation of the Turkish Lira also caused investors to turn to foreign currency-denominated products.

News Source: 12punto