Consistent with the rise in interest rates, there were outflows from the bond fund segment, offset by an increase in investments in equity funds. The outlook for fund flows, and hence for the fees that banks charge in exchange for distributing investment products, is uncertain.
On the one hand, investment funds' business might be buoyed by investors' appetite for higher returns to at least partly offset the impact of inflation. On the other hand, the ongoing risk of further, sudden adjustments in financial asset prices encourages investment in safer instruments which, given the changed market conditions, do nevertheless offer satisfactory returns.