Greek banks are seeing a noticeable shift in investor behavior as the ongoing conflict in the Middle East rattles global markets, dampening appetite for riskier investment products and testing the country’s growing asset management sector.
Since early March, fund managers tied to major Greek lenders have reported a cooling in demand, with investors either scaling back exposure to higher-risk mutual funds or pausing new allocations altogether until the economic fallout from the conflict becomes clearer.
Recent data from the Hellenic Fund and Asset Management Association, the industry’s main body, highlight the change in momentum. Net inflows across the market have reached roughly €981 million since the start of the year — still positive, but markedly slower than last year’s pace.
Slower Growth, Sharper Shift
The deceleration has been pronounced. Compared with the same period in 2025, inflows are down about 42%, with the slowdown accelerating after early March, when the outbreak of hostilities involving the U.S., Israel and Iran triggered heightened volatility across international markets.
Average monthly net inflows, which hovered near €400 million in January and February, dropped to around €200 million in March, effectively halving within weeks. By contrast, in early spring last year, fresh capital flowing into mutual funds had exceeded €570 million over a similar period.
Equity mutual funds have recorded net outflows of about €70 million since early March, while balanced funds saw withdrawals of roughly €7.5 million. Investors are increasingly retreating from products perceived as more exposed to market swings.
Flight to Safety Gains Pace
At the same time, lower-risk categories are attracting renewed interest.
Bond funds have led the inflows, drawing approximately €152 million over the same period. Meanwhile, liquidity management funds have seen net inflows of about €50 million, marking a notable resurgence in demand.
Market participants say many investors are effectively “parking” cash in these safer instruments, waiting for conditions to stabilize before redeploying capital.
This repositioning has also weighed on total assets under management. As of April 1, the market stood at €30.2 billion, down by €1 billion from the end of February, when the war started. The decline reflects losses in funds with significant exposure to equities and bonds during a period of heightened volatility.
Measured Response from Investors
Despite the shift, bank executives describe investor behavior as relatively composed.
They point out that the current adjustment is far more measured than the sharp sell-offs seen following Russia’s invasion of Ukraine, suggesting a more mature approach among Greek retail and institutional investors.
“We are seeing a calmer, more disciplined reaction from our clients,” market sources claim, noting that inflows have remained positive even under adverse conditions.
Long-Term Growth Still Intact
Greek banks continue to view asset management as a key growth driver, underpinned by the sector’s relatively low penetration compared with the rest of Europe.
Business plans across the industry project annual growth in assets under management exceeding 5% in the coming years. That trajectory could translate into income gains of up to 50% over a three- to five-year horizon.
For now, however, the sector remains closely tied to geopolitical developments. Bank officials say that any de-escalation in the conflict would likely unlock pent-up demand and support a swift recovery in inflows.
Even amid uncertainty, the resilience of net positive flows is seen as a sign of structural change.
“It says something about how investor culture in Greece is evolving,” one industry source noted.
Source:ot.gr
