German funds take €45bn; assets slip to €4.1 trillion

Frankfurt

Fund companies in Germany recorded net new business of €45.1 billion in the first quarter of 2022, according to BVI, Germany’s investment funds association.

Around 700 fund companies are active in the German market, ranging from independent fund boutique banking to subsidiaries of insurance companies.

BVI’s 116 members cover over 95% of the German market.

In January, retail funds and Spezialfonds saw a record inflow of €30.3 billion.

Spezialfonds are alternative investment funds (AIF) for institutional investors.

The slump on the stock markets from mid-February to early March in the wake of the Ukraine war dampened new fund business.

In February, German funds saw a net inflow of €13 billion, almost exclusively in Spezialfonds.

In March, Spezialfonds generated €6.4 billion, while retail funds recorded outflows of €2.7 billion as inflows in balanced funds (€2.6 billion) were offset by outflows from equity funds (€2.6 billion) and money market funds (€2.2 billion).

“In terms of new business, the German fund market is proving robust in the European arena,” said BVI.

“According to Morningstar, sales of retail securities funds launched in Europe fell from EUR 235 billion in the first quarter of 2021 to EUR 51 billion in the first quarter of 2022 –a slump of almost 80 per cent.

“In Germany, sales of such funds have roughly halved compared with the prior-year period.”

The decline on stock markets worldwide has reduced the assets under management of German funds.

At the end of March, the German fund industry managed €4.150 trillion — 4% less than at the beginning of the year.

Open-ended Spezialfonds account for the largest share of assets at €2.103 billion.

Open-ended retail funds manage €1.420 billion, closed-ended funds €45 billion and discretionary mandates €581 billion.

The German fund industry now manages a total of €683 billion in funds that are deemed to be sustainable in accordance with Article 8 or 9 of the EU Sustainable Finance Disclosure Regulation (SFDR).

Accordingly, 19% of the total assets of retail funds and Spezialfonds are invested in products with sustainability features.

For retail funds, this figure stands at 40%, which is below other fund markets.

Net assets in property funds managed by German fund companies grew from €255 billion at the end of March, 2021, to €288 billion over the past 12 months.

Of this volume, open-ended Spezialfonds accounted for €44 billion, open-ended retail funds accounted for €128 billion and closed-ended funds accounted for €16 billion.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.