Tuesday February 17 2009

News Source: Fund Regulation

Focus: Other

Type: General

Country: European Union




The European Fund and Asset Management Association (EFAMA) has today, 17th February 2009, released its quarterly statistics for the fourth quarter of 2008 and results for the full year of 2008. The Report also provides a detailed outlook for 2009 which includes the analysis of areas that need to be progressed and trend in the UCITS industry.

The Report notes that 2008 has been a difficult year for investors and fund managers as total investments have fallen 22% during the year. It is highlighted that the main reasons for the hit that investment funds have taken are due to the crisis in the financial markets including liquidity issues, competition from banks and the increased fear of recession adding pressure on investors demand for funds.

EFAMA emphasizes the importance of perspective at this time and advises that, more positively, investment fund assets in Europe have doubled over the last decade, confirming the importance and strength of the European fund industry.

In regards to the 2009 outlook, the Report advises that demand will be subdued until investor confidence grows at which point UCITS will attract strong inflows. Factors that will also help to strengthen investor demand include:

* Low short term interest rates- To convince investors’ to seek alternative investments to bank deposits to secure higher returns;

* Low stock valuations- the collapse in stock prices in 2008 and the low price-to-earnings ratios have increased the attractiveness of equity funds. Whilst some investors remain concerned about risky investments, others are ready to switch investment back towards equity funds to benefit from positive earnings rebounds; and

* Growth perspectives in Asia- These countries enjoy higher GDP than Europe and the US and will remain an important source of demand for UCITS.

Finally, the Report notes that it is important to make progress with the UCITS IV Directive to take advantage of, for example, cross border distribution and key investor information.

To view EFAMA’s highlights please click on the above link.

To view EFAMA’s detailed report, please click here: http://www.efama.org/images/stories/quarterly_statistical_release_december_20081.pdf