Germany: Fund industry registered inflows of EUR 42 billion during first half of 2019
- Property funds doubled sales year-on-year
- Actively managed equity funds posted inflows
- Spezialfonds: portfolio management by specialised asset managers on the rise
The German fund industry recorded new business to the tune of EUR 41.9 billion net during the first half of 2019, thus surpassing the figure for the first six months of 2018 when inflows stood as EUR 40.6 billion. At EUR 38.3 billion, new business was primarily generated by open-ended Spezialfonds. Open-ended retail funds registered inflows totalling EUR 1.8 billion while closed-ended funds raised EUR 1.7 billion. On a net basis, discretionary mandates did not attract any fresh capital. Since the beginning of the year, the assets managed by fund companies rose from EUR 2,954 billion to EUR 3,226 billion. This equates to an increase of 9 per cent. Of the entire asset volume, EUR 1,772 billion is invested in open-ended Spezialfonds while open-ended retail funds account for EUR 1,053 billion, discretionary mandates account for EUR 390 billion and closed-ended funds make up EUR 11 billion.
Property funds topping retail funds sales chart
With net inflows of EUR 6.1 billion, property funds topped the sales chart for open-ended retail funds from the beginning of January to the end of June 2019. This is more than twice the volume of the prior-year period (EUR 2.8 billion). Property funds' net assets under management grew by 11 per cent to EUR 104 billion over the past 12 months. Equity funds collected new money to the tune of EUR 0.7 billion net during the first half of 2019. Actively managed products contributed EUR 2.8 billion in inflows, while equity ETFs recorded outflows in the amount of EUR 2.1 billion. Totalling EUR 385 billion, equity funds had the greatest volume of assets under management. Balanced funds recorded inflows of new money to the tune of EUR 0.3 billion. With outflows totalling EUR 3 billion, bond funds and money market funds had a negative impact on retail fund sales. Euro-denominated short-term bond funds alone registered outflows amounting to EUR 7.2 billion.
Spezialfonds: outsourcing of portfolio management on the rise
Over recent years, the outsourcing of portfolio management has noticeably increased in the open-ended Spezialfonds segment. Of the EUR 1,677 billion held in securities Spezialfonds, non-affiliated asset managers managed EUR 738 billion. This equates to a share of 44 per cent. At the end of 2012, this figure stood at 37 per cent.
This is also due to the fact that many institutional investors opt for specialised asset managers, for example in the US, to manage certain asset classes, such as corporate bonds or emerging-market securities. Moreover, foreign asset managers use the portfolio management of funds to access the German market without having to establish their own fund company. In recent years, the share of portfolio manager outside the group has risen quite rapidly in the open-ended property Spezialfonds segment, holding net assets totalling EUR 95 billion. Seven years ago, they only looked after 4 per cent of these net assets, now it is 26 per cent.