Net inflows and assets under management (AUM) hit record highs in Europe last year, according to data provider Morningstar.
European-domiciled open-ended funds had €8.9trn of AUM at the end of 2017, up from €7.96trn a year before. Net inflows reached €682.8bn, with fixed income products “raking in a record €288bn”, Morningstar said.
Assets in long-term passive funds grew more than those in actively managed funds, primarily in equity. Bond funds remained dominated by active management, with the market share of passive fixed income funds rising only slightly from 11.8% to 12% year on year.
BlackRock was the most popular European asset manager last year, bringing in €62.7bn of assets. Net inflows were €16.5bn.
Standard Life’s Global Absolute Return Strategies fund had the most outflows, with €9bn exiting.
In Germany, assets under the management by the fund industry topped €3trn last year, a record high, the country’s investment management association announced.
The figure represents a 77% increase over 10 years, according to the BVI.
At €1.6trn, assets in open-ended institutional investment funds (Spezialfonds) accounted for more than half of the total. Assets held in discretionary mandates amounted to €379bn.
Open-ended funds had their second-best year for sales, with managers attracting €160bn of net inflows. Discretionary mandates saw outflows of €16.2bn, and closed-ended funds brought in net inflows of €2.9bn
Spezialfonds attracted the most inflows – €88.1bn – with retirement benefit schemes such as professional pension schemes and pension funds, as well as insurance companies, accounting for a combined total of €63.5bn.
Tobias Pross, the BVI’s president, said: “Along with the low interest rates, retirement planning was the main driver behind new business for funds.”
The BVI also said that outsourcing of portfolio management had “markedly increased” in the open-ended Spezialfonds segment. At the end of 2012, 37% of assets in open-ended securities Spezialfonds were managed by third-party managers, and at the end of 2017 this stood at 41%.
“This is due to the fact that foreign asset managers use the portfolio management of funds to access the German market without having to establish their own investment management company,” said the BVI.
“In addition, many institutional investors opt for specialised asset managers to manage certain asset classes, such as emerging-market securities or corporate bonds.”
The trend was beginning to gain traction in open-ended property funds, it added.
In Switzerland, assets under management in the fund market stood at CHF1.1trn (€1trn) at the end of 2017, having passed the CHF1trn mark in July for the first time.
SFAMA, the Swiss fund and asset management association, said that together with CHF845bn of assets in discretionary mandates for Swiss and foreign institutional clients, the total volume of assets managed by asset managers in Switzerland came to around CHF2trn.