BVI: 2018 was a good year for funds
- Assets of the German fund industry doubled since 2008
- Balanced funds and property funds at previous year's level in terms of sales
- Retirement benefit schemes dominate new business
"Even though it was a weak year for the stock markets, the fund industry developed positively during 2018. Investment funds attracted EUR 119 billion net in fresh capital. With the exception of the two record years of 2015 and 2017, new business is hovering at the previous years' level", said Tobias C. Pross, President of the German Investment Funds Association BVI, at the Association's annual media conference. At just under EUR 3 trillion in assets under management, the fund industry is still at a record high. Of this volume, EUR 1.6 trillion is invested in Spezialfonds, while retail funds account for EUR 974 billion, discretionary mandates account for EUR 352 billion and closed-ended funds make up EUR 9 billion. Since the end of 2008, total assets have almost doubled.
Spezialfonds achieve third-best sales year
Within the open-ended investment fund segment, Spezialfonds remain the stable linchpin of sales, recording inflows to the tune of EUR 94.7 billion during 2018. This was their third-best sales year. After retail funds started the year, as usual, with a strong first quarter (EUR 12.4 billion in inflows), turbulent stock markets curbed further inflows, particularly into equity funds. In contrast, balanced funds and property funds held their own during 2018 and achieved new business at the level of 2017. On balance, open-ended retail funds raised EUR 21.8 billion in new money.
Balanced funds ahead in new business
Balanced funds are topping the open-ended retail funds sales chart for the sixth consecutive year, raising EUR 21.6 billion net in 2018. As in the previous year, investor focus was on products that invest equally in equities and bonds, accounting for EUR 15.8 billion. Open-ended property funds collected EUR 6.4 billion in investor money. Equity funds only recorded net inflows of EUR 0.7 billion, with equity ETFs contributing EUR 1.3 billion. As a result of the positive stock market performance in 2017, equity ETFs had attracted EUR 14 billion during that year. Bond funds registered outflows of EUR 5.7 billion in 2018, compared to inflows of approximately EUR 21 billion during 2017. In both years, it was in particular Euro-denominated bond funds for short-term bonds specifically designed for institutional investors that dominated new business.
Retirement benefit schemes topping sales chart for three years in a row
In 2018, all institutional investor groups invested fresh money in Spezialfonds. "Old-age provision is the key factor for new business. Pension schemes and pension funds have been entrusting investment funds with new money totalling EUR 37.4 billion net, that is 40 per cent of new business", said Tobias C. Pross. They have been topping the sales chart since 2016. Since the end of 2016, assets for retirement benefit schemes rose from EUR 326 billion to their current level of EUR 466 billion. As such, their share in Spezialfonds assets has risen from 22 per cent to 29 per cent. At EUR 545 billion, insurance companies continue to be the largest investor group in terms of volume. Their share equates to 34 per cent of Spezialfonds assets.