EFAMA Statistical Release: Trends in the European Investment Fund Industry (Q3 2007)

Highlights: 

1. Net sales of UCITS recorded net outflows of EUR 61 billion in the third quarter of 2007.  An exceptional combination of adverse circumstances led to this outcome.  On the one hand, the prolonged volatility in stock markets, against the background of relatively high valuation and increased risk of global economic slowdown, led to outflows from equity funds for the third consecutive quarter.  On the other hand, the credit and liquidity crisis and growing inflationary pressures sapped investor confidence in fixed-income funds.  As a result, bond and money market funds did not take over from equity funds in what is their typical supportive role in periods of stock market volatility.

2. Eleven countries recorded net outflows in the third quarter.  France was the hardest hit, reflecting the negative impact of the financial market turmoil on dynamic and enhanced short-term funds.  Contagion effects and enhanced competition from banks issuing debt securities at higher rates than money market fund returns also contributed to exits from regular money market funds.  In contrast, Luxembourg-domiciled funds continued to attract positive inflows in the third quarter, reflecting sustained buoyant Asian investors’ demand for UCITS.  Inflows were also positive in the Czech Republic, Denmark, Hungary, Norway, Slovakia, Switzerland and the United Kingdom. 

3. For the first nine months of 2007, total net sales of UCITS reached EUR 131 billion.  This level was significantly lower than in the corresponding period of 2005 and 2006. 

4. Total assets in UCITS fell by 2 percent in the third quarter to reach EUR 6,355 billion at end September 2007.  All fund categories except “other” UCITS experienced a fall in assets.  Conversely, total assets in the non-UCITS market rose by 1.1 percent in the third quarter to EUR 1,760 billion.  Growth in alternative management and institutional funds explained this outcome.     

5. The combined assets of UCITS and non-UCITS fell by 1.3 percent in the third quarter to reach EUR 8,115 billion at end September 2007.  Since end 2006, the European investment fund industry saw its assets rise by 7.4 percent, or EUR 559 billion.  Eleven countries enjoyed greater-than-average asset growth: Denmark, Finland, Hungary, Ireland, Lichtenstein, Luxembourg, Norway, Poland, Slovakia, Turkey and the United Kingdom.

6. Available information for October shows stronger net inflows in Finland, France, Germany, Norway and Sweden, with net sales turning positive in October for the first time in recent months in France, Germany and Sweden.  Looking forward, renewed tensions in the debt markets in November and continued uncertainty about the risks to economic growth are likely to weigh down the results for November and possibly December.

EFAMA Latest Statistical Release: Trends in the European Investment Fund Industry (Q3 2007) (file - 100.2 kB)