Pandemic forces asset managers to recalibrate their expansion efforts, says PwC
PwC Luxembourg has announced the release of the 21st edition of their annual Global Fund Distribution (GFD) poster showcasing the growth of cross border funds and distribution in 2020. The research covers all border markets globally and provides a unique and global view of the health of the industry.
The top five asset management companies for cross-border distribution funds, based on the number of countries in which they distribute worldwide, are Franklin Templeton, Fidelity Investments, HSBC, Schroders, and BlackRock, with three of them based in the US, and two based in the UK.
A total of 14,128 cross-border investment funds accounted for 128,520 registrations globally as of end-2020, a 0.7 per cent increase in the number of funds and a 5.8 per cent increase in the number of registrations compared to 2019.
The number of cross-border ETFs decreased by 6.2 per cent to 4,482 in 2020. A record 297 ETFs closed during the year. This was primarily driven by increased competition, mergers and acquisitions and the failure to attract assets.
The number of cross border funds domiciled in Luxembourg increased by 1.1 per cent (from 7,331 funds in 2019 to 7,410 funds in 2020), while cross-border funds domiciled in Ireland increased by 0.8 per cent (from 3,941 funds in 2019 to 3,973 funds in 2020). Luxembourg also retained its leading position on distribution, with Luxembourg-domiciled funds distributed in 79 countries compared to 59 countries for those domiciled in Ireland.
Portugal experienced the largest increase in the number of new registrations in 2020 with 749 new registrations in the country. This increase reflects investor demand for ETFs in the country with 637 ETFs being registered in 2020 alone. Germany, Switzerland, Luxembourg, and Austria make up the total top 5 fund registration centres for the year.
Singapore maintained its position as the top market in terms of new registrations in 2020, with 471 new registrations bringing its total to 4,168 in 2020, with 3,182 mutual funds and 986 ETFs. Hong Kong remains in second place with 1,102 registrations.
With 221 new funds, Israel led the way in terms of new registrations in 2020. However, in terms of total number of registrations in the region, the United Arab Emirates remains first with 334 funds.
Chile represented the top market for new registrations in 2020, with 256 new registrations - mainly consisting of ETFs (218). Chile also maintained its leading position in terms of total number of registrations, with 1,818 funds registered for sale in 2020.
South Africa was the top market for distribution, recording 18 new registrations, of which seven were mutual funds and 11 were ETFs. In terms of total number of funds registered for sale, South Africa remained the leader in the continent with 269 funds registered for sale.
Robert Glover, Partner, Global Fund Distribution at PwC Luxembourg, says: "As we release our 21st annual global fund distribution poster, the world is still in the grip of the COVID pandemic. Whilst the data reveals relatively good evolution in terms of cross-border registrations during 2020, we see a notable, and probably expected, decline in the launch of new funds versus previous years. As asset managers put the brakes on expansion plans, for both new funds and new jurisdictions, efforts were concentrated on developing their distribution footprint with existing products and in mature markets."