EUROPE – Renewed interest among European investors in equities led to an increase in the total assets of UCITs and other nationally regulated investment fund markets of 8.3% during the fourth quarter of 2001, bringing the year end total to €4,594bn, a 1.4% increase over 2000, according to the latest figures issued by the European federation of investment funds and companies, Fefsi.

In particular, the report says that the UCITs market, which accounted for €3,611bn of the industry total, grew by 8.8% in the last quarter of 2001, which is in sharp contrast to the previous quarter’s 8% decline. Fefsi says that this increase was driven mainly by equity funds and is evidence of the recovery in the equity markets, despite the continuing volatility of equity prices.

But Fefsi points out that gains in the UCITs fixed income funds prove that investors still appreciate the greater security that bonds offer. The fixed income funds’ assets rose by 12.7% to €910bn in 2001.

The non-UCITS market, dominated by German Spezialfonds, UK closed-ended investment trusts and property funds, rose by 6.6% in the final quarter last year to record a year-end total of €983bn.
However, over the year, this segment of the market actually declined by 1.6%. Fefsi suggests the decline would have been greater had the Spezialfonds and investment trust markets not performed as well as they did.

Overall, Ireland was the best performing country, clocking up a 34.3% increase in business from €208.2bn in 2000 to €279.7bn in 2001 Its market share now stands at 6.1%. However, Luxembourg, France and Germany continue to dominate the industry, with 20.2%, 19.1% and 17.3% of market share respectively. The UK (12%) and Italy (8.9%) are the next biggest.

See attached table.