Assets have continued to flood into Germany's Spezialfonds at a record pace.

Hans Karl Kandlbinder, in-dependent investment adviser and ex-pert on the Spezialfonds market, shows in his latest report that total assets in the sector soared to over DM451bn ($242bn) by the end of April.

This means a 66% share of the total funds volume in the securities and money market investment funds sector in_Germany of DM688.283bn," he says in his report. Once again, this proportion is higher than the preceding year, and underlines the continuing importance of Spezialfonds with-in this sector, he adds.

In the first four months of 1997, 160 new funds were set up, compared with 1.33 per day in the same period the year before.

Equities are gaining popularity as an asset class among Spezialfonds fund managers. Citing the latest figures, Kandlbinder shows at the end of April, shares made up nearly a third of total assets of securities-based Spezialfonds, up from 30% at the end of 1996 and 25% at the end of 1995.

At the end of last year, insurers and institutional pensions schemes re-mained the most significant investors in Spezialfonds, accounting for 51% of Spezialfonds assets.

Foreign investors only accounted for 0.9% of investment in Spezialfonds. "It is still surprising that the proportion of non-German investors in Spezialfonds is so small," he says. He warns that the draft 1999 tax reform law could hit the funds."