ECB policy measures lead to strong demand for Ucits during Q4 2012
Investment fund assets in Europe in 2012 increased by 12.4 per cent to EUR8,944bn with net assets of Ucits increasing by 11.7 per cent to EUR6,295bn, according to figures released by the European Fund and Asset Management Association (EFAMA).
Net assets of non-Ucits increased by 14.1 per cent to EUR2,649bn.
Net sales of Ucits reached EUR201bn, returning to positive territory in 2012 after recording net outflows of EUR97bn in 2011.
Long-term Ucits recorded net inflows of EUR239bn in 2012, after registering net outflows of EUR64bn in 2011. Bond funds made up the lion’s share of net inflows (EUR203bn), eclipsing the net inflows into equity funds (EUR2bn) and suggesting investors remained risk-averse and cautious about the economic outlook almost until the end of 2012.
Money market funds continued to suffer from a low interest rate environment, recording net outflows of EUR39bn, up from EUR33bn in 2011. Sustained low interest rates, coupled with continued competition from banks for deposits remained challenges for the money market funds industry.
Net sales of non-Ucits reached EUR139bn in 2012, up from EUR99bn in 2011. Special funds (funds reserved to institutional investors) attracted EUR112bn in net new money, compared to EUR94bn in 2011, as insurance companies, pension funds and other institutional investors continued to use these funds to invest the recurrent contributions collected from their members.
The market share of Luxembourg and Ireland in the Ucits assets increased to 47.2 per cent at end 2012, compared to 45.8 per cent a year earlier. Total net sales of Ucits in these countries reached EUR187bn or 93 per cent of total Ucits net sales in 2012.
Total Ucits and non-Ucits assets at end 2012 stood 108 per cent higher than at end 2002 and 45 per cent higher than at end 2008.
Total investment fund assets represented 62 per cent of the European Union’s GDP at end 2012. This confirms the important contribution of investment funds as financial vehicles raising capital from retail and institutional investors, and providing funding to other sectors (monetary financial institutions, non-financial corporations and government agencies).
Peter de Proft (pictured), director general of EFAMA, says: “2012 was a good year for the European investment fund industry and its clients, thanks to improved financial market conditions, which led to strong demand for Ucits during the year. This increased demand resulted partially from the decisive policy measures taken by the ECB and its commitment to do “whatever it takes” to save the euro. Progress in reducing fiscal imbalances and strengthening the governance of the euro area also supported investor confidence.”
- Special Reports
- How to set up a hedge fund