German Spezialfonds are booming, with sales receipts just issued for the funds in1997 breaking all previous records at DM107bn ($60bn), a massive leap of over 70% on 1996 figures.

This pushed the total volume of assets in the tax advantaged funds to over DM555bn from the previous year's total of just under DM400bn, giving them an overall share in the investment fund market of 77.3%

The figures dwarfed the investment into Germany's public and property investment funds, which experienced mixed fortunes over the year with a rise from DM2.6bn to DM25.1bn (18.1% of the market) for the open public funds, and a fall from DM14bn to DM6.4bn (4.6%) for the public real-estate funds.

And the signs are that the Spezialfond explosion is not over, with new receipts for the first five months of 1998 already totalling over DM52bn, an average increase of just below DM2bn per month on1997.

The Spezialfonds success is attributable on the whole to the securities- based funds, according to a report by Hans Karl Kandlbinder, a recognised authority on the funds.

Real-estate Spezialfonds, he points out, are also making a breakthrough though, in terms of new investments, providers and holders. Overall, such growth has prompted an unbelievable proliferation of new funds in circulation. Bundesbank statistics show 550 Spezialfonds were set up in 1997, giving a rise of 18.6% in their number.

Such was the intensity of action in the sector last year, that no fewer than two new funds were issued for every banking day in Germany.

This pace of development shows no sign of slacking, with 297 funds set up before May this year, pushingthe issuance figure up to three funds per working day.

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