Twenty-two countries recorded an increase in net assets of UCITS during the quarter. Strong growth was recorded by all the largest domiciles of UCITS with the United Kingdom recording growth of 7.2% followed by Ireland (6.2%), France (6.0%), Luxembourg (5.9%) and Germany (5.4%), according to the latest quarterly statistical release from the European Fund and Asset Management Association (EFAMA).
According to the report, the Nordic countries recorded above average growth during the quarter with Norway registering growth of 9.2 percent, followed by Finland (7.5 percent), Sweden (7.3 percent) and Denmark (6.9 percent). In the Mediterranean region, Spain experienced growth of 1.6 percent followed by Italy with growth of 0.4 percent.
Portugal and Greece saw a reduction in net assets of 0.2 percent and 1.9 percent respectively. Elsewhere, Poland recorded strong growth in net assets of 16.1 percent, partly reflecting a 7 percent depreciation of the polish zloty vis-à-vis the euro during the quarter. Romania and Malta also recorded above average growth during the quarter of 7.3 percent and 6.0 percent respectively.
Total UCITS net assets increased by 5.8 percent in the quarter to stand at EUR 5,961 billion at end December 2011.
Twelve countries recorded net inflows into UCITS in the first quarter of 2012, with Ireland leading the way with net sales of EUR 31 billion, followed by Luxembourg (EUR 29 billion) and France (EUR 24 billion). Net sales of bond funds played a key role behind these large net inflows. Ireland and France also benefitted from strong investor demand for money market funds. Switzerland (EUR 8 billion), the United Kingdom (EUR 6 billion), Norway (EUR 2 billion), Poland (EUR 1 billion) and Denmark (EUR 1 billion) all registered net inflows in excess of EUR 1 billion during the quarter.
Net outflows were registered in fourteen countries during the quarter, with net outflows in excess of EUR 1 billion being recorded in Italy (EUR 4 billion) and Germany (EUR 2 billion). These net outflows were mainly attributable to balanced funds in Italy and to equity funds in Germany.
Growth was attributed to ECB liquidity operations during the quarter which assuaged investor confidence somewhat during the quarter. "Nevertheless the low net sales of equity funds coupled with large net sales of bond funds highlight an element of investor caution remains," said the report.
This can be seen from the trends in monthly net sales. Equity funds registered net inflows of EUR 9 billion during the quarter, up from net outflows of EUR 29 billion in the previous quarter. Bond funds registered strong net sales of EUR 49 billion during the quarter, compared to net outflows of EUR 11 billion in the fourth quarter of 2011. Balanced funds witnessed net inflows of EUR 8 billion, compared to net outflows of EUR 9 billion in the fourth quarter. Money market funds experienced net inflows for the second consecutive quarter registering EUR 22 billion of net inflows, up from EUR 11 billion in the previous quarter.
Strong net inflows into Irish-domiciled UCITS contributed to assets serviced by the Irish Funds industry hitting EUR 2 trillion.
The Irish funds industry has grown year on year every single year over the last 23 years bar a slight fall in 2008. As well as leading hedge fund centre, it is now the fastest growing retail (UCITS) funds centre in the world - up some 500% in the past 11 years.
Pat Larder, Chief Executive of the Irish Funds Industry Associatio (IFIA), added: “It is worth noting that the Irish funds industry has passed this milestone of the €2 trillion mark by showing growth in every asset class and that the industry reached another milestone in recent months with domiciled funds passing the €1 trillion mark.
Larder also said that the strong partnership with stakeholders such as Government, Government departments and Government agencies such as the IDA was key to growing the reputation of Ireland as a domicile for investment funds into the future.
What made financial headlines over the weekend?
290,000 already affected
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension