Tuesday September 9 2008

News Source: Fund Regulation

Focus: General - Fund Regulation

Type: General

Country: European Union




The latest figures published by the European Funds and Asset Management Association (EFAMA) reveal that the total net assets of the UCITS market shrunk by 1.3 per cent in the second quarter of 2008.

Compared to the situation in the first quarter, the industry witnessed two notable and offsetting developments: firstly, money market funds suffered from a reversal of flows, from EUR82 billion of net inflows in the first quarter to EUR18 billion of net outflows and secondly, outflows from equity funds fell considerably, from EUR76 billion in the first quarter to EUR16 billion in the second quarter.

A number of countries including Luxembourg benefited from positive inflows attributed to the slowdown in outflows in equity and bonds funds as the overall European UCITS industry withstood net redemptions from UCITS. The UK and Ireland-domiciled UCITS products also reported positive inflows.

Total net assets of UCITS fell by 1.3 percent in the second quarter to EUR5,584 billion at end June 2008. Since end 2007, total assets in UCITS decreased by 9.4 percent. The heavy losses endured by stock markets were the driving force behind this evolution. Around 15 percent of the decline reflected net outflows, whereas market depreciation represented the remaining 85 percent.

Total assets in the non-UCITS market increased by 0.7 percent to EUR1, 696 billion at end June 2008, up from EUR1, 685 billion at end March. Since end 2007, total assets in non-UCITS fell by just 3 percent. Sustained net flows to special funds reserved for institutional investors (EUR16 billion and EUR14 billion in the first and second quarters, respectively) helped cushion the impact of poor stock market performance.The combined assets of the investment fund market in Europe, i.e. the market for UCITS and non-UCITS, fell by about 0.9 percent in the second quarter to reach EUR7, 280 billion at end June 2008. Since end 2007, the European investment fund industry has seen its assets fall by 8.0 percent.