About the 2012 FACT BOOK
The 10th edition of EFAMA's annual compilation offers comprehensive information on recent trends in the European investment fund industry and analyses a number of issues that are at the centre of the future development of the industry.
Important trends relate to recent developments in the investment fund markets in and outside Europe, to the growth perspectives of the industry, the role of investment funds in pension provision, ownership of investment funds and much more.
The Fact Book also includes:
- Reports on the investment fund market in each of the 27 European EFAMA member countries.
- A statistical section presenting historical data and assets under management of the largest European managers.
- Lists of EFAMA's Members.
Important: the digital version of the EFAMA Fact Book 2012 is "read-only". It is not available in PDF format.
To order the Fact Book: go to our online webshop
Key Findings
EUR 8 trillion of assets held by investment funds in Europe: Investment fund assets stood at EUR 7,960 billion at end 2011, compared to EUR 8,178 billion one year earlier. Considering how the world economy was shattered by major economic shocks – the earthquake in Japan, the U.S. debt downgrade and the spreading of the sovereign debt crisis in the euro area – it can be argued that the industry proved resilient in 2011. It should also be noted that total investment fund assets stood 29% higher at end 2011 than at end 2008. And over the last 10 years, UCITS have grown by 72%.
Reduced demand for long-term investment funds: Long-term UCITS (UCITS excluding money market funds) suffered from net withdrawals of EUR 64 billion in 2011, reflecting a worsening economic outlook in Europe and increased risk aversion among European households. On the other hand, total non-UCITS attracted net new money amounting to EUR 99 billion in 2011, thanks primarily to strong inflows into special funds by insurance companies, pension funds and other institutional investors.
Households remain the first economic sector owning investment funds: Many European households responded to the financial crisis by funnelling their savings increasingly into non-financial assets. This being said, households in the euro area continued to hold EUR 1,253 billion of their financial wealth in investment funds at the end of 2011. Insurance companies and pension funds followed with investment fund holdings of EUR 1,046 billion and EUR 627 billion, respectively. Taking into account non-euro area countries, households’ holdings of investment funds totalled EUR 1,823 billion in Europe at end 2011.
Worldwide investment fund net assets amounted to EUR 20 trillion at end 2011: Demand for worldwide investment funds remained resilient in 2011, attracting EUR 215 billion in net new money, thanks to strong net inflows into long-term investment funds in Asia/Pacific (EUR 63 billion), Brazil (EUR 35 billion) and the United States (EUR 239 billion). Overall, long-term investment funds attracted almost EUR 2 trillion in net inflows in 2009-2011, with bond funds accounting for 51% of all inflows. In the world market Europe ranks as the second largest market for investment fund assets after the United States. The top five country domiciles worldwide were the United States, Luxembourg, France, Brazil and Germany.
Outlook for 2012 and 2013: The volume of net sales of long-term UCITS in 2012 and 2013 will depend above all on the trends in economic growth in Europe. According to our calculations, if the IMF July 2012 projections for economic growth are fulfilled, net inflows into long-term UCITS are expected to total EUR 75 billion in 2012 and to reach EUR 170 billion by 2016. Whether or not this forecast eventually proves correct will directly depend on the capacity of policymakers to address downside risks to the global recovery and financial stability, which continue to loom large. If GDP growth would only reach 0.5% in 2013, long-term UCITS would record net sales of EUR 50 billion in 2012. It is also likely that money market funds will continue to record net outflows as long as money market interest rates stay low.
Outlook for the medium term: The challenge posed by increased longevity and the projected changes in pension systems should persuade European households to save more and longer for retirement. This represents a significant opportunity for UCITS, which are eminently suitable to serve as the underlying investment products within complementary pension plans. There are at least four other factors that should increase households’ appetite for investment funds over the coming years: (i) sustained progress in resolving the crisis in the euro area and strengthening trust in markets and long-term financial investments, (ii) the emergence of a new generation of funds capable of addressing individuals’ needs for new sources of complementary retirement income, (iii) the creation of a true level playing field in the distribution of retail financial products across Europe, and (iv) the expected savings accumulation in China, India and other rising economic powers, which should diversify their financial wealth towards UCITS. One major threat to the future of the industry is the financial transaction tax, which would lead to a massive closure of money market funds and reduce the attractiveness of long-term investment funds.
Some Key Figures...
For any additional information, please contact info@efama.org.
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