Turkish investment funds have seen a substantial outflow of ₺128.7 billion ($2.7 billion) in net assets since August 28, following a regulatory overhaul by the Capital Markets Board (CMB). This exodus has affected 1,047 funds, with their investor base shrinking by 15,817. The new rules, which took effect on September 11, lower the ownership disclosure threshold for listed companies from 5% to 3% and redefine the calculation of free float by excluding stakes held by major shareholders (10% or more), the company itself, founders, and certain related entities.
The CMB's actions were prompted by concerns raised by global index provider MSCI regarding opaque ownership structures, coordinated transactions involving smaller companies, and the transparency of fund holdings. MSCI had previously cut free-float ratios for some Turkish companies and warned that holdings by funds not meeting its requirements would be excluded from free-float calculations. The index provider also threatened a lower market classification for Türkiye if concrete progress wasn't made by November 2026.
The market has reacted with a sharp divergence in Borsa Istanbul indexes. The BIST 100 fell 0.8% and the BIST 500 dropped 2.1% since August 28, while the BISTTUMY (tracking stocks outside the BIST 100) declined 4.8%. In contrast, the BIST 30, which is not subject to these restrictions, gained 2.7%. This has led fund managers to shift towards large-cap names, with one portfolio management company reportedly purchasing ₺18 billion worth of BIST 30 stocks, causing five shares, including bank stocks, to hit their daily price limits. Tera Group's announcement of talks to acquire Pusula Finans Holding further boosted positive sentiment in this segment of the market. Notably, Pusula Portfoy Yonetimi AS, a significant player, reported that two of its funds on the Tefas platform shrank by over 90%, from ₺115 billion to below ₺8 billion ($166 million).
