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Specialised investment funds: at a zenith

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Introduction
This year IPE is very pleased to issue again the ‘Kandlbinder Report’ in English on the key Spezialfonds sector, which forms a dominant part of the German investment fund marketplace. The report, which has been published annually in Germany for over 20 years, details the development of this vehicle, which is extensively used by institutional investors.
Dr Kandlbinder is regarded as one of the founding fathers of the development of the Spezialfonds and was active in the establishment of the first of these funds in Germany in 1969/71 when he was directly involved in pensions investment. Now he acts as an independent investment consultant based in Grafing near Munich, having built up an internationally high reputation as a result of advising on Spezialfonds and the investment funds arena generally.
This report was published recently in German by Zeitschrift für das gesamte Kreditwesen (issue 16/99) in Frankfurt by Fritz Knapp Verlag.
For the purposes of this translation, we have used the term ‘specialised investment fund’ for Spezialfond. This is an open-ended investment fund under the German Investment Act (Gesetz über Kapitalanlagegesellschaften – KAGG). The main difference between a specialised investment fund and an open-ended investment fund or mutual fund available to the public lies in the fact that a specialised investment fund exclusively belongs to the investors, who cannot number more than 10 and who are not individual persons, but have a legal form such as a corporation, foundation, institution or association – most funds are set up with just one or two institutions as the investors. There can, in addition, be certain tax and accounting advantages. Through an investment committe usually formed when setting up the fund, the investor has the opportunity to influence the investment policy of the fund.
Each fund is set up and run by a Kapitalanlagegesellschaft (KAG), which is an investment management company established under banking law. The term KAG has been transalated as ‘investment trust company’.

There have been several milestones in the success of the specialised investment fund over the past three years. At the end of 1996, fund volume stood at almost DM400bn; by the end of 1997 at DM555bn, and at the end of 1998 was close to DM730bn. Thus, in 1998, even the real estate specialised investment fund had achieved a breakthrough (see Kandlbinder in Der langfristige Kredit, Vol. 12/99, pp 390–97). Nevertheless, this rapid growth of the specialised investment fund in 1998 was fully attributable to the securities-based specialised investment fund. The total volume of the money market specialised investment funds, of which there were three at the beginning of the year and only two at the end of the year, at around DM230m, is negligible by comparison with the size of the securities-based specialised investment fund medium.

Another record year in 1998
Net sales receipts (see Table 1) into the specialised investment funds during 1998 broke all previous records, at DM130bn (up 21.7% against the previous peak year, 1997, which was itself already 71.6% up on 1996):
Even with the inclusion of sales receipts into foreign funds of German provenance (Luxembourg and Ireland), almost 75% of the net sales receipts in the German investment funds branch went to specialised investment funds in 1998. To put it another way, specialised investment funds attracted approximately three times more receipts than all of the investment funds open to the general public together. (The comparative figures for sales receipts by specialised investment funds in the previous year were almost 80% and nearly four times more than with investment funds open to the general public.)
As at the end of 1998, according to Bundesbank statistics, in terms of funds volume well over half of the receipts of the investment funds branch, in fact 64.3%, went into specialised investment funds, whose volume at the end of 1998 had risen to over DM728bn (see Table 2).
Specialised investment funds volume thus saw a further powerful increase during 1998, by DM173.1bn or 31.2%. Volume growth in 1998 was therefore once again considerably greater in absolute terms than in the previous year, even if in percentage terms no longer quite as much because of the high starting base (at that time it was DM157.6bn, or 39.7%).
The growth in new fund issues in 1998 once again raced ahead at an almost unbelievable pace. According to Bundesbank statistics, 737 (739 according to responses to a survey by the author – although these minor differences can be disregarded) new specialised investment funds were set up during 1998. This represents a 21% rise in the number of funds. In the previous year there were 550 new specialised investment funds, a growth rate at that time of 18.6%.
Much more meaningful, however, in the light of this once again excessive new specialised investment funds circulation rate, is the finding that in Germany, for each calendar week in 1998, at least 14 new specialised investment funds were issued, or almost three (around 2.9, as non-banking days still have to be taken into account) for every banking day.

... and the boom goes on
In the first five months of 1999 (it should be noted at this point that since January 1 all Bundesbank capital market statistics have been converted to euros), net receipts in the securities-based/money market specialised investment funds totalled ¬26,100m, an average of ¬5,220m a month (1998 : ¬5,571m a month). The comparative figures for German investment funds open to the general public show net receipts in the first five months of 1999 almost equal to those of the specialised investment funds, if the receipts of foreign funds of German origin, at around ¬2.5bn in the first quarter of 1999 are included and two further months projected. As at the end of May 1999, the figures for investment fund numbers and fund volumes are as follows: 532 equity-based investment funds open to the general public (including mixed funds and old-age provision special assets), with a fund volume of ¬94,145m, account for almost 16% of the total funds volume of the securities-based/money market investment fund branch; 301 money market and bond funds open to the general public, at ¬ 91,167m, represent just under 15.5% of the entire funds volume of the securities-based/money market investment fund sector.
However, as at the end of May of this year, 4,474 securities-based/money market specialised investment funds, with an average volume per fund of almost ¬91m (the year before, as at the end of May 1998, the figure was ¬89m), achieved a total funds volume of ¬404,974m, a share of 68.6% of the total funds volume, ¬590,286m, in the securities-based and money market investment funds branch. This share has risen once again from the previous year’s level, and underlines the continued importance of the specialised investment fund, which constitutes over two-thirds of the securities-based/money market investment fund market. According to Bundesbank capital market statistics, new specialised investment fund issues so far in 1999 are nevertheless not quite at the dizzy heights of the previous year: 250 new fund issues in the first five months of 1999 mean de facto “only” 2.5 new specialised investment funds for each banking day (with 99 banking days from January to May 1999) compared to 2.9 the year before.

Critical phase following the change of government in Germany
Before and after the new year 1999, the investment sector, including the specialised investment fund medium, had faced probably the most critical phase of its existence. In the middle of the boom period already referred to, the government’s plans to tax certain profit-taking operations at fund level fell like a bolt from the blue at the end of October/beginning of November 1998.
This attempt by the new ruling coalition was all the more surprising and unexpected as three similar initiatives by the old ruling coalition (first the 1994 law to regularise taxation and combat tax abuse, then the motion from the state of Bavaria for an “anti-tax loophole law”, and finally the 1999 law on tax reform), had come to nothing, apart from anything else because the majority of (SPD-governed) federal states did not agree with these setbacks for Germany’s status as an investment base and financial centre. Many holders of specialised investment funds spent weeks of total uncertainty, and even considered getting out of this form of investment completely, or at least of realising any possible capital gain on the fund before the end of 1998.
But the branch and institutional investors held on, and won even from the Green faction agreement on the crucial point that taxation of disposal gains at fund level would without doubt give rise to an “excessive taxation burden”, which would assuredly have no chance before the Federal Constitutional Court. The law, which for political reasons is known as the “tax relief law”, has brought into effect some tightening of the tax regulations for investors – such as, for example, the extension of the period of capital gains tax liability, the calculation of capital gains tax on share dividends and the tax coverage of so-called private disposal transactions within the meaning of §23 paragraph 1 no 4, paragraph 2 and 3 of the income tax law, which were formerly known as “margin deals”). However, not only did the excess taxation deriving from profits on disposal of securities being chargeable to tax at fund level not materialise, but based on what has been learned from this discussion on the tax relief law, should have disappeared for good from future discussions.

Equity quota and foreign share continue to rise
The asset distribution weighting of the securities-based specialised investment funds has again shifted perceptibly in favour of domestic and foreign equities. At the end of 1997 these already accounted for 36% of the funds volume of the securities-based specialised investment funds, compared with 30% at the end of 1996. At the end of 1998, they had already reached around 38% (see Table 3).
The proportion of foreign securities (bonds and equities) in the specialised investment fund portfolio has also risen constantly over this three-year period: from 14% at the end of 1995, through 18% and 23% at the end of 1996 and 1997 respectively, to 30% at the end of 1998.
So far in 1999 (see Chart 1) the following marked trends have been established. As at May 1999, the proportion of equities in the specialised investment fund placements amounted to 39.4% of the fund volume, and the proportion of foreign equities to over one-third, 37.1%; the one-third mark having been passed for the first time in April. What seems particularly striking is the fact that since the beginning of 1999, the proportion of foreign equities in the portfolio of German securities-based funds has exceeded the proportion of domestic equities. The proportion of foreign equities at the end of 1998 was already equal to that of domestic equities (19% to 19%); by January 1999 the ratio was already 21% to 19%, and as at May 1999 the figure was 23% to 16.4% of the total fund volume of securities-based specialised investment funds in favour of foreign equities.

Substantial, albeit stagnant, rises in value
From the Bundesbank capital market statistics (see Chart 2) can be determined the increases in value for 1998 in special funds, as well as the high receipts (the same was naturally true of the investment funds open to the general public). Specialised investment funds volume as at the end of 1997 less actual distribution of income for 1998 plus net receipts in 1998 give the calculated value for fund volume as at December 1998. If we look at the latter in relation to the actual values for specialised investment fund volume as at December 1997, the effective value increase in 1998 can be calculated, and even subdivided into bond, equity and mixed specialised investment funds. However, the capital gains realised in specialised investment funds cannot be derived from these, as they are beyond more conclusive calculation. The undisclosed reserves in securities placements by the specialised investment funds have therefore risen during 1998 only in the case of the bond funds (up 57% compared to the previous year); equity funds (down by 28.5%) and mixed specialised investment funds (down by almost 7%) have shrunk considerably, but have nevertheless on balance remained ahead of everything else (down by only 0.7%). These cushions, which in French are strikingly known as “réserves occultes”, are still impressive, but should not, however, lead tax-hungry fiscal authorities to make some disastrous decisions, since there are naturally other phases, too, which will come again (for example, it would only take interest rates to rise once more).

On the structure of holders of specialised investment funds
All 52 investment trust companies took part in the 1998 year-end survey. As at the end of 1998, according to Bundesbank statistics, these companies were managing some DM722.4bn of the securities-based/ money market specialised investment funds volumes (see Table 4). The analysis of the survey results shows a figure of DM722.7bn, a minor difference which can be disregarded in view of the scale.
In the first place, it must be noted that, in 1998, the securities-based/money market specialised investment funds market once again saw huge growth: the entire funds volume rose from DM550.6bn at the end of 1997 to DM722.4bn at the end of 1998, a rise of DM171.8bn, or 31.2%. According to replies to the survey by the author, the number of funds increased by 739, or 21.1%, from 3,499 at the end of 1997 to 4,238 securities-based/money market specialised investment funds as at the end of 1998. (Bundesbank figures show 3,492 specialised investment funds at the end of 1997 and 4,224 at the end of 1998 – this difference too can be explained and may be disregarded.) In this market, which in overall terms is growing strongly, the relative sizes of the different investor groups show almost constant trends, as follows:
q The insurance industry and institutional pension funds still constitute the most important investor groups, with a share of specialised investment funds volume in excess of 50.4%. This share has increased in absolute terms (+DM72bn specialised investment funds placements, compared to +DM90bn the previous year) but, in relative terms the trend has declined slightly from a 53.2% share.
q The second most important investor group of business enterprises can be subdivided into two distinct subgroups:
l those known as the banks’ own security deposit funds, with a steadily increasing 23.8% share of the specialised investment funds volume (or in absolute terms +DM53bn new specialised investment funds placements, compared to +DM38bn the previous year), in which the savings banks and co-operatives sector institutions are particularly strongly represented, and
l those business enterprises with a modestly increasing 17.1% share (compared with 17% the previous year) of the specialised investment funds volume, whose specialised investment funds placements serve largely as “capital with social aspects on individual property rights”, that is, the “funding” for pension provisions. In absolute terms, receipts of these specialised investment funds placements once again rose by DM30bn, compared with DM22bn the previous year).
q Although the relative share of the group of other licensed specialised investment funds investors rose again from 6.1% the previous year to the current level of 6.4%, and in absolute terms the total sum invested increased by almost DM13bn (previous year +DM8bn, with a similarly declining relative share).
q Although placements in specialised investment funds by the social insurance institutions group continued to fall sharply in relative terms to 1.2% (from a 1.4% share the previous year), in absolute terms these investments still grew by around DM1bn compared to the previous year.
q Although the group of foreign specialised investment fund holders, whose share of the specialised investment fund volume only rose from 0.6% to 0.9% in relative terms, in absolute terms the total placements by non-German holders of specialised investment funds practically doubled. While the volume of specialised investment funds held by non-German investors may still be surprisingly small, it nevertheless amounted to well over DM6bn at December 1998. However, those non-German investors aware of the “hidden attractions” of the specialised investment funds for foreigners, particularly those with equity commitments in Germany, are also taking full advantage of these benefits. Almost 80% of the volume of those 34 specialised investment funds are equity and mixed specialised investment funds (see Chart 3).

De facto agreement with Bundesbank statistics
If we consider the fact that the aggregation categories between the Bundesbank and the survey by the author are different and dissimilar in coverage, it may be confidently stated that the results are de facto “equal”, as may be discerned from Table 5 in the “bridge from the author’s survey to the Bundesbank statistics”. In relation to the volume invested, demarcation differences of several hundred million Deutschmarks can in effect be disregarded – even the remaining relatively major classification difference between “Other enterprises”/ “Private organisations and others” in the case of the Bundesbank on the one hand and “Commercial enterprises”/“Others” in the author’s survey on the other would in the context certainly not have made further investigations any more meaningful.

Market shares of specialised investment fund providers
Once again, the insights shown by the distribution of the investment trust company (ITC) groups’ market share as at the end of 1998 are informative (see Table 6). With the volume of the market as a whole surging ahead by around 31% (previous year +40%), the previous trends of the relative shifts in market share are continuing. The specialised investment funds volumes of the investment trust companies of the major/regional and private banks may be growing strongly, but just below the levels of market growth (+27.5% and +24% respectively), which means that in relative terms market shares are falling back slightly.
Once again, the investment trust companies of the savings banks/state have increased their share of specialised investment fund volume, almost +36% and also with the specialised investment fund new issues +27.3% (where the market average is 21.1% in the case of new fund issues, see Table 7). Here, the renewed rally by the security deposit funds (see Tables 8 and 9) of the “smaller” institutions had a considerable effect.
Stronger than the market as a whole, as can be seen clearly in Table 7, was the growth in volumes in 1998 of the specialised investment funds of the ITCs of the co-operative sector, insurance interests and foreign bank subsidiaries, but not those of the “others”. In the case of the latter, only the number of new issues of specialised investment funds was above average. Compared to the previous year, these growth rates were once again particularly noticeable in the investment trust companies of the co-operative banks (volume almost +39% , number of funds almost +49%), and even more marked among the ITCs which are insurance interests (volume +44%, number of funds however on average only +21.6%), and among the ITC group of the foreign bank subsidiaries (volume +39.2%, number of funds +23.4%). In the “others” group, although the new issues of specialised investment funds increased substantially, the volume growth remained below average.
Among the ITCs, the operations of the former AXA-ELFO have been amalgamated into AXA-Colonia (formerly Rheinische KAG). In addition, under the category of foreign bank subsidiaries, three new companies offering specialised investment funds have emerged, namely Schroders, State Street and Julius Baer. As a result, there are now 52 ITCs operating on the specialised investment fund market in Germany. More investment trust companies offering specialised investment funds have already been established in 1999, and these will be included in this study next year. Various name changes (for example, Degef to DeAM, LGT to Invesco, MAM to Mercury, or SKA to CSAM) have been taken into account in Table 6. MAT remains (following discussions with the company) under “Others”, although it would also be possible to group MAT under foreign bank subsidiaries.
The trends, presaged the year before, namely stronger growth than the market as a whole in the ITC groups of the co-operative banks, insurance interests and foreign bank subsidiaries, therefore not only continued in 1998, but to some extent were actually intensified. The same may also be seen among the ITC groups of the major/regional banks, and of the private banks. The setback in the development of the ITC group of the savings banks/state banks clearly seems to be over, and the trend is once again stronger than for the market as a whole.

Microanalysis of market shares by ITC groups
The view of the global market share is even more informative if the market segments are arranged with the individual ITC groups and then broken down accordingly, as in Table 9. However, it has been taken into consideration that in the ITC groups of the co-operative banks, firstly, and secondly of the “others”, there are only a few ITCs in each, of which again in each case one or two dominate in terms of volume in such a way that individual conclusions may be drawn. With the classification of market share on the basis of structure of the specialised investment funds holders (Table 4) to the ITC groups as defined in Table 6, both of the ITC groups referred to above (co-operative banks and “others”) have therefore been omitted.
Even if “only” 89.7% of the whole specialised investment fund volume is included in the survey, Table 9 nevertheless provides some surprising insights, because for each ITC group observed, the whole fund volume of the relative ITC group is recorded and hence the comparison with previous years is possible.

Moderate shifts
The shifts in the investor structures for each of the ITC groups in 1998 are not especially large compared to 1997, but the following points nevertheless stand out:
q The insurance industry is naturally most strongly represented “among its own kind” with its specialised investment funds, and is continuing to build up this share, then among the ITCs of the private banks, and then among those ITCs which are foreign bank subsidiaries, although the trend is also falling, and penultimately among the ITCs of the major and regional banks. The proportion of specialised investment fund holders attributable to the insurance industry is in relative terms smallest among the ITC group of the savings banks/state banks, and declined further in 1998, although the trend decreased.
qThe fact that the specialised investment fund holders (German) social insurance institutions do not appear in the ITC foreign banks group is no surprise. What is surprising is the fact that the number of social insurance institutions which are specialised investment fund holders in the ITC groups of the major and regional banks, and also the private banks, turns out to be above average, while in the ITC group of the state banks and savings banks the number is below average.
Among the ITCs of the insurance interests, the proportion of specialised investment funds of the social insurance institutions is at exactly the average level for the branch. Overall, however, the proportion of specialised investment funds of the social insurance institutions is declining, and only with the investment trust companies of the private banks is the trend positive.
q Institutional pension schemes continue to be most strongly represented in the ITC group of the private banks, and the trend is actually rising, now followed by the ITCs which are subsidiaries of foreign banks. The proportion of specialised investment fund volume that is managed by the major and regional banks for the institutionalised pension schemes is now the third largest group. The likely conclusion from the fact that the major share of this investor group with ITCs of foreign bank subsidiaries is that those institutions which wish to invest more outside Germany and outside the EC/EEA are therefore particularly strongly represented here because they wish to “buy” expertise in foreign markets from the foreign parent companies of the ITCs. What is really striking is that investors from the institutional occupational pension schemes, which on average comprise 13.3% of the specialised investment funds holders, represent almost 18% of the specialised investment funds holders (determined by funds volume) among the foreign bank ITCs, whereas this group of investors is relatively markedly under-represented among the ITCs of the savings banks/state banks and of the insurance interests.
q The most striking fact, however, is the recent change in structure of the business enterprise specialised investment fund holders, and within this group under the category of “credit institutions, own security deposit funds”. All ITC groups – with the exception of the ITC group of the insurance interests – are increasing substantially in this branch as a whole, although this investment sector must be looked at differently, from commercial enterprises on the one hand and credit institutions/own security deposits on the other. If we look at the specialised investment funds of the commercial enterprises (excluding own security deposits of banks), their overall share as at the end of 1998 is exactly 17.1% of the total specialised investment fund volume (previous year 17%): on a rising trend the ITCs of the major and regional banks, the foreign banks and the private banks (in that order) appear to be above the average, and the ITCs of the savings banks/state banks and insurance interests, on a falling trend, well below the branch average. In the case of the own security deposits of banks, the picture is completely different: the ITCs of the savings banks and state banks dominate, on an upward trend, what is their “scene”, followed, albeit at a considerable distance, but nevertheless surprisingly, by the ITCs that are foreign bank subsidiaries. While the ITCs of the major and regional banks have barely managed to hold on to their share of their own security deposits of banks, and the insurance ITCs have fallen further behind, the ITCs of the private banks have been able to increase their share of own security deposits of banks relatively sharply.
q Among the other licensed specialised investment funds holders, the role of the major and regional bank and private bank ITCs continues to stand out. The three other ITC groups observed have below-average representation in this market segment, although the ITCs that are foreign bank subsidiaries have managed exactly to treble their share. Here, however, the assumption must also be that even the “charities”, with their specialised investment fund placements, are increasingly leaving Germany, and by opting for “foreign ITCs”, are looking to “buy into” the market know-how of the parent banks on their home stock markets.
q Dominant – though not surprisingly – in the still small business segment of foreign specialised investment fund holders, which nevertheless grew strongly in 1998, is the ITC group of the foreign bank subsidiaries. The ITC groups of the major and regional banks, the savings banks and state banks, and the insurance interests (in that order) managed to increase their relative market share in this sector in 1998, whereas the private bank ITCs reached the branch average for specialised investment funds for foreign holders in 1998.

Digression: average size of specialised investment funds per ITC group
In this regard, however, the following point is interesting: the average size per securities-based specialised investment fund across the entire branch as at December 1998 (according to the survey, fund volume DM 722,728m, 4,238 securities-based specialised investment funds) is DM171m: the analogous figures for the different ITC groups are shown in Chart 4. This means that the volumes of the securities-based specialised investment funds of the private bank ITCs, as well as the major and regional banks, are close to the average; the former slightly over, the latter just below; the volumes of the specialised investment funds of the insurance interests are clearly above average, those of the specialised investment funds of the ITCs of the foreign banks are close to the average, those of the savings banks/state banks and co-operative banks are still well below average. The volumes of the specialised investment funds of the “others” ITC group, by their excessive size, which is, however, already beginning to be reduced, constitute a peculiarity which must be seen for what it is.

Specialised investment funds analysis for insurance enterprises/pension funds/death benefits funds
If the analysis is done from the “other side”, to the extent that this is possible, through the publications of the Federal Supervisory Office for Insurance Enterprises [Veröffentlichungen des Bundesaufsichtsamtes für das Versicherungswesen_(VerBAV)] and the annual reports of the BAV, the specialised investment fund placements of the largest investor group, namely all of the insurance groups and the pension funds/death benefits funds, Tables 10 to 12 provide some interesting insights. This investor group owns more than 50% of the specialised investment fund volume. This agrees with Table 4 (based on the survey carried out by the author) and with Table 5 (based on Bundesbank figures), and thus in general terms represents the most significant investor group among the specialised investment funds.
Since 1975, when the major amendment to the insurance supervision law [Versicherungsaufsichtsgesetz,_(VAG)] took the first steps towards liberalisation and deregulation, combined with more transparent accounting for external observers, even in the case of capital investments, the position of securities special assets underwent some major changes (see Table 10). In the interim (from 1990–94), the specialised investment funds, even under their own sub-heading as “securities-based specialised investment funds” were exactly accessible. Unfortunately, following a BAV statistical reform of the documentary proof to be supplied by the insurance undertakings, this was no longer possible after 1995, so that once again it was a matter of resorting to estimates, which did nevertheless correspond reasonably well to the actual circumstances.
Accordingly, the following point may be made: the discontinuation of the practice of showing the securities-based specialised investment funds under their own heading after 1995, because of the BAV statistics, was still disadvantageous for the analysis of the capital investments of the German insurance enterprises which were managed on a funds basis. In view of the insurance enterprises’ “powers of intervention” in the investment policy of the investment trust companies there is a crucial difference between investment funds open to the general public on the one hand and specialised investment funds on the other.
“Self-determined” investment preferences with specialised investment funds
Only with investment through specialised investment funds was the insurance enterprise able to use its company-specific investment preferences to advantage by means of its involvement on the investment board – for example, to prevent, or at the appropriate time to reduce, undesirable regional selectivity in investment. In this connection, one has only to think of the consequences of the Asian crisis. Investing through investment funds open to the general public, insurance enterprises, as unit holders legally do not have this control facility. They can, however, quickly divest themselves of these units by selling them, if they no longer agree with the general direction of the investments. Showing the insurance enterprises’ capital investments separately from the investment funds open to the general public and specialised investment funds in the BAV statistics should have made it possible to ascertain the extent to which the fund-type investment of the insurance enterprises/pension funds/death benefits funds is determined by outside factors or even self-determined .
In any event, in view of the significance of the specialised investment funds for the insurance enterprises/pension funds/ death benefits funds investment group, the following summary can be made:
17.74% of total investments by insurance enterprises/pension funds/death benefits funds were invested through investment funds as of December 1998 (previous year 15.07%). Most of these, almost 16% of total investments as at the end of 1998, were in securities-based specialised investment funds (previous year 13.56% ).
If the heading of securities (that is equities, fixed-interest and fund certificates), which is in any case only “fund capable” is taken as a reference basis as at December 1998 (figures as at December 1997 in parentheses), the corresponding reference figures are as follows: 51.32% (46.15%) of securities-based investments are certificates from securities-based investment funds, most of which, in December 1998 exactly 46.16% (in December 1997 41.54%) of securities-based investments were certificates from securities-based specialised investment funds.
If the sales receipts for the year 1998 among the securities-based/money market specialised investment funds according to the Bundesbank capital market statistics are set in relation to the corresponding net receipts “units in securities special assets” or according to the new category “investment units” with insurance enterprises/pension funds/death benefits funds in accordance with BAV publications, the significance of the insurance enterprises in the broadest sense for the investment medium securities-based specialised investment funds once again becomes clear (see Table 11). Once again in 1998 the lion’s share, almost 45% , of the net sales receipts of securities-based specialised investment funds was derived from the insurance enterprises, pension funds and death benefits funds which are subject to VAG supervision;
In 1998, this investor group once again recorded a respectable growth rate of around 50%, compared to what had flowed into securities-based specialised investment funds on balance the previous year. The trend towards new specialised investment fund issues by the insurance enterp

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