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FEFSI data reveals pick-up in equity funds

EUROPE - New data from the European investment fund body FEFSI show that equity funds rose in the third quarter.

"What is interesting is the pick-up in equity fund net sales," said Bernard Delbecque, senior economic adviser at the Brussels-based Fédération Européenne des Fonds et Sociétés d'Investissement.

Equity funds gained 25 billion euros in net new money during the period - the highest quarterly amount since the second quarter of 2001. "Momentum in equity fund demand has thus continued to pick up in the past couple of months," FEFSI said in a statement.

The report showed that total investment fund assets rose by 2.7% during the third quarter to 4.6 trillion euros. "The overall result since the end of 2002 was a 8.7% increase in total fund assets."

Inflows into money market funds turned negative for the first time since the end of 2000. Delbecque said this was not too surprising and it shoed that investors were trying to find a higher return.

FEFSI says that France, Luxembourg and Germany dominate the industry with a global market share of 59%.

"Strong investor activity in bond funds also continued to sustain UCITS asset growth, adding over 18 billion euros in the third quarter and 92 billion euros since the beginning of the year."

Luxembourg saw the highest asset growth, due to strong inflows into equity, bond and balanced funds. Spain "also recorded particularly strong asset growth".

The report added: "Scandinavian countries continued to enjoy above-average growth, thanks to the strong performance of equity funds. Denmark and Norway also benefited from positive inflows into bond funds."

"In Eastern Europe, UCITS assets continued to grow remarkably in Poland thanks to strong inflows into equity and balanced fund assets."

Meanwhile, funds data company FERI-FMI said that fund groups with cross-border strategies took the "lion's share" of net sales in September.

"These groups, based principally in Luxembourg and Dublin, achieved net inflows of 4.6 billion euros compared with redemptions totalling 3.2 billion euros from Europe's domestic players.

"Their success came from high subscriptions in equity funds despite stock market volatility that wiped nearly 57 billion euros from the asset value across the European fund industry."

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