In simple terms, the savings landscape in Alicante during the period shows that deposits and bank money remained a dominant choice for savers, even as profits from many institutions stayed slim and inflation continued to bite. By year’s end, residents kept more money in banks and observed a shift in how investment products performed. While first-quarter figures suggested strength in deposits, a broader market slowdown trimmed returns across several instruments as concerns about inflation and the wider economy weighed on sentiment.
Recent data, compiled by Inverco Observatory, which gathers Spain’s leading fund managers, indicate that by the end of 2022 Alicante residents held mutual funds totaling 6.765 billion euros, a 3.9% drop from a year earlier. The decline reflects softer equity and fixed-income markets, and the overall mutual fund sector posted a negative 9% return. Jose Luis Manrique, Inverco’s director of studies and statistics, noted that these losses were partly offset by new contributions from participants.
In contrast, the banking system showed resilience in another segment. The value of bank deposits rose to 35.895 billion euros in December, up almost 860 million euros year over year, a rise of 2.44%. This increase points to a seasonally stronger savings phase in the first half of the year. However, between September and December, the rise cooled as inflation pressured households and companies, driving some savers to use funds to cover rising costs.
Across the country, the Madrid Stock Exchange remains a barometer for market mood, with the sector’s performance shaping public perception. The difference between the high and low points in savings highlights a conservative tilt among Alicante’s investors. Inverco’s calculations show that mutual funds in the province represented only 18.8% of deposits held in banks, four percentage points below the national share of 22.7%. This gap contrasts with regions such as Teruel, where 53% of deposits are represented by funds, Guipuzcoa at 47.6%, and La Rioja near 45.6%.
Jose Luis Manrique explains that differences in financial literacy across Spain, along with local preferences, help explain Alicante’s relatively low fond participation. Many residents still favor tangible assets like real estate, leaving less capital available for other investment types.
Nonetheless, early-year data hint at a potential shift. Aggregated national figures suggest some reallocation from deposits to funds, with funds rising about 6.5% through May. This trend aligns with investors seeking alternatives to lower-yielding deposits when interest rates rise. Fixed-income funds, in particular, saw more activity, with contracts increasing as investors diversified away from traditional deposits.
That shift is echoed by industry voices. The head of Financial Assets at Banqmi, a specialized arm of iAhorro, notes that despite higher rates, a surplus of liquidity in the system supports continued demand for fixed-income vehicles. In a broad European context, Eurostat data show Spain’s one-year average deposit rate around 1.16% in March, well below the euro area average of 2.16% and France at 2.68%, with Estonia reaching 3.14%. These figures underscore how European rate dynamics differ by country and sector, influencing savings choices and the appeal of different instruments.
What has changed is the funding mix chosen by investors. A greater share of funds now comes from public sector debt and corporate bonds, with fixed-income funds accounting for about 29.8% of the country’s total investments last year, up six percentage points from 2021. Guaranteed loans also rose, reaching 12.7% compared with 9% in 2021, while investments in mixed and variable income declined.
Mortgages in Alicante will become more expensive this year as rates rise
As Euribor trends upward, lenders are cautious about deposits while the main reference rate for variable-rate mortgages edged toward higher ground. Euribor is projected to finish May near 3.86%, a touch higher than April’s 3.75%. Many market observers expect Euribor to exceed 4% over the summer as the European Central Bank signals continued rate hikes amid inflation pressures and improving eurozone conditions.