European Fund and Asset Management Association research finds UCITS corporate bond fund outflows stayed below ESMA stress test levels across three recent shocks

The European Fund and Asset Management Association has published a Market Insights report analysing daily and monthly redemptions from European UCITS corporate bond funds during the Covid-19 shock in 2020, the 2022 interest rate hike and the 2025 tariff shock. The report concludes that outflows remained relatively contained across all three episodes and stayed well below the levels used in European Securities and Markets Authority stress test scenarios, including the assumption of 22% outflows within one week, indicating that hypothesised liquidity mismatches did not materialise in a way that would pose a material financial stability threat. During the Covid-19 shock, most daily flows as a share of the fund's previous-month net assets remained close to zero, and only about one in nine corporate bond funds experienced a single day with outflows above 10% of net assets during the most turbulent periods. In 2022, daily outflows above 10% of net assets occurred in less than 0.3% of observations analysed. The 2025 tariff-triggered shock showed a similar pattern, with such outflows again occurring in less than 0.3% of the sample and only about one in ten funds recording even a single day above that threshold. In commentary accompanying the report, EFAMA said the findings support a risk-based supervisory approach focused on fund groups that are structurally more exposed to extreme outflows rather than broad measures across the full fund universe.