Intermonte: “Recent volatility and market uncertainty are expected to continue, at least in the short term, and will likely limit inflows in the coming months.”
Gross inflows from new ISA subscribers are estimated at €40 million for 2022
According to data released by Assogestioni, Ordinary ISA recorded outflows of 330.3 million euros in the third quarter of 2022. And market volatility and uncertainty could continue to limit inflows in the coming months, according to the latest Monthly Report on Italian mid-small caps by Intermonte’s research team. Bucking the trend are alternatives, which put up 14.5 million euros in inflows (albeit down from the April-June period).
Looking at assets under management, assets under management by ordinary ISA amounted to 16.5 billion euros at the end of the third quarter of the year compared with 1.4 billion euros for alternative ISA. The quarterly net recount of ordinary ISA slipped from 160 million euros in the first quarter to 96 million euros in the second quarter, for 366 million euros since the beginning of the year.
Il Sole 24 Ore’s ISA Observatory, they recall from Intermonte, had calculated 63 million euros of outflows in July, 57 million in August, and 124 million in September for ordinary ISA, then continued with -92.1 million in October and -102 million in November. As for alternative ISA, however, inflows in the third quarter amounted to 14.5 million, down from 153 million in the second quarter and 83 million in the first quarter.
“Recent market volatility and uncertainty are expected to continue, at least in the short term, and will likely limit inflows in the coming months,” Intermonte’s research team warns. “In light of the current scenario and the third-quarter 2022 ISA data, we have revised down our 2022 inflow assumptions to -358 million from -159 million and note that visibility remains low due to both the general market environment and the specific Italian post-election political transition.” In the long term, they add, they expect “interest in this product to remain quite high due to the tax benefit” and, from the distributor’s point of view, “to be able to count on a long-term commitment from the investor.”
Based on these forecasts, Intermonte estimated gross inflows from new ISA subscribers at €40 million in 2022. As for those who subscribe to ISA on an ongoing basis, we calculate total inflows in the second year to be between 35 and 40 percent of what was set aside in the first 12 months; in subsequent years, however, inflows are expected to be on average half of what was invested in the second year. “Finally, we calculate that the amount of capital that will be withdrawn by investors who decide to exit the fund before the end of five years (for any reason) is equal to -5.3 percent of aum in 2022 and beyond,” they conclude from the independent investment bank.
