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UCITS now 78% of European fund market

BELGIUM – UCITS, or Undertakings for Collective Investment in Transferable Securities, now account for almost 78% of the European investment fund market, according to new data from the European Federation of Investment Funds and Companies, FEFSI.

“With 3.313 trillion euros invested in UCITS, this segment of the business accounted for 77.8% of the fund market at end-December 2002,” said the group in a news release. The total was up from 3.294 trillion euros at the end of September 2002.

The combined assets of the investment fund market in Europe, taking on board the UCITS market and other nationally regulated types of investment funds, declined by 6.2% in 2002, it said.

“Investors reacted to the severity of this decline by increasing their purchases of bond, money market and real-estate funds.” But there was a 0.7% rise in the fourth quarter.

France, Luxembourg and Germany have a combined market share of 58%.

FEFSI said that equity fund assets declined slightly (0.6%), whereas bond and money market funds recorded positive growth as these funds continued to receive net new cash flow in most countries.

The UCITS industry saw a 6.8% decline in its assets – “driven by the combination of declining stock prices and the slowdown in investor demand for equity funds”.

But the organization said that continued inflow “indicates that investor demand for UCITS continued to be sustained in 2002 despite the nerve-racking financial environment”. It said UCITS funds posted a net inflow of 71 billion euros.

Equity funds received a net inflow of 15 billion euros in 2002, despite the three-year slide in world stock markets.

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