Europe switches to money market and bond funds
EUROPE - Last year was a dismal one for Europe’s mutual investment funds, with year on year net sales down 52% to 98.3 billion euros, according to FERI Fund Market Information. Of this, money market funds accounted for 78 billion euros, 78% of 2002’s total.
According to FERI, groups selling funds cross borders delivered the highest equity sales volumes last year of 16.1bn euros, though they suffered outflows in the second half of the year. FERI also says that the retail market has returned to their bank providers for fund products thus thwarting the hopes of those promoting open architecture developments.
Diana Mackay of FERI says comments that 2002 was a year in which the quality of the distributor relationship showed itself to be more important than brand muscle. She also notes that early 2003 results show that bond funds are currently attracting investor attention. FERI has just published the latest edition of the ‘European Fund Market Yearbook 2003’ (firstname.lastname@example.org).
Figures for the first quarter issued by FEFSI, show that UCITS funds across 15 European markets had total sales of 39.6 billion euros, of which 33.3 billion euros were flows to bond funds and 23.5 billion euros, while equity funds saw outflows of -8.9 billion euros and balanced funds of –8.2 billion euros.
Among the biggest fund markets, only France recorded positive asset growth due to an increase of 30 billion euros in money market funds and 4 billion euros in bond funds, says FEFSI (European Federation of Investment Fu8nds and Companies), based in Brussels. In Italy, equity fund assets fell some 11 billion euros, but total UCITS remained practically constant due to flows into fixed income and bond funds. Both Germany and Luxembourg experienced strong inflows into fixed income funds, but recorded a drop in overall assets.
The total assets in the UCITS fund market fell by 1% during the first three months of 2003 to 3,265 billion euros from the end of 2002. The proportion assets in bond and money market funds came to 55% at the end of March, compared to 43% a year before.