The European fund industry enjoyed healthy inflows over the first half of 2024. Opposite to mutual funds, ETFs had estimated net inflows in every month so far. These inflows into mutual funds and ETFs occurred in a generally positive market environment. Nevertheless, equity markets looked somewhat vulnerable given the high valuations of the market leaders. With regard to this, it is not surprising that investors are nervous and reacting quite fast on any news that may impact the current market environment negatively. This is not only true for economic news, as the geopolitical tensions in the Middle East, especially the

It’s fair to say that 2023 was a challenging year for portfolio managers around the globe since the markets were driven by a number of different factors and unpredictable incidents. Each of these could have caused a major market downturn on their own. First of all, there were a lot of geopolitical tensions around the globe beside the still ongoing war in Ukraine, which showed that democratic states might be more vulnerable than one may think. The concerns of investors, especially in Europe, increased toward the end of 2023 since the actions taken by the Houthi rebels in the Red

The European ETF industry enjoyed inflows over the course of June. These inflows occurred in a somewhat unstable but positive market environment in which some asset classes showed positive results. Meanwhile, others performed negatively over the course of the month. Market sentiment was still driven by hopes that central banks, especially the U.S. Federal Reserve, may have reached the last phase of their fight against high and increasing inflation rates and may, therefore, start to keep interest rates at least stable quite soon. Some investors already expect that there might be room for decreasing interest rates later this year. Nevertheless,

Market observers fretting over the lack of new ETF launches in Europe are discussing myriad reasons for the lack of products in the pipeline. My view on the reasoning for this is somewhat simple. The current market environment—with increasing interest rates and somewhat unpredictable markets—holds ETF promoters back from bringing new products to market. One consequence of tighter monetary policies introduced by central banks on both sides of the pond is that seed money—which is needed by literally all ETF promoters—faded away when interest rates moved up. This is because central banks and other institutions starting to pay interest rates

European investors in general were further in a risk-on mode over the course of the year 2021 as equity funds were the best-selling asset type for the year. In fact, the European fund industry enjoyed record inflows (€724.1 bn) over the course of the year 2021 despite the unclear economic situation caused by the ongoing COVID-19 pandemic, disruptions in the delivery chains of some industry sectors, and steadily rising inflation. That said, it is remarkable that the year 2021 was the second year in a row during a global crisis in which the European fund industry enjoyed record inflows. With

The introduction of the Sustainable Finance Disclosure Regulation (SFDR) is seen as one of the key milestones for the accomplishment of the EU action plan for financing sustainable growth. Even as the guidelines for the implementation of the technical standards of this regulation are not finalized yet, it is worthwhile to analyze how fund promoters and investors act with regard to fund launches and investments under the new SFDR classifications according to the articles six, eight, and nine. While the former can be measured by the number of funds (primary share classes) classified as article six, eight, or nine compliant,

European investors were generally in a risk-on mode over the course of the year 2021 despite the increased volatility in securities markets. Given the general market environment it was no surprise that we witness some months with mixed results for the flows within the different asset types, even as the European fund industry enjoyed inflows over the course of the first nine months of 2021. In more detail, the promoters of mutual funds enjoyed inflows of €337.0 bn. In line with this, the promoters of ETFs enjoyed record inflows of €126.9 bn over the course of the year so far.

Despite the deteriorating situation with regard to the COVID-19 pandemic in some parts of Europe, Q1 2021 was a positive quarter for the European fund industry. As the overall flow pattern in Europe has further normalized, investors in Europe continued to be in risk-on mode. Within this environment the assets under management in the European fund industry rose from €12.3 tr (as of December 31, 2020) to €13.7 tr at the end of Q1 2021. While ETFs held €1.1 tr, or 8.01% of the assets under management in Europe, the vast majority of €12.6 tr, or 91.99%, was held by

Looking back on the year 2020, it can be said that no investor has seen such a year before, even if one looks back to the Great Depression or World Wars I and II. The year started off with fears about a possible war between North Korea and the U.S., an upcoming trade war between the U.S. and China, and a possible hard Brexit. In a normal year, these geopolitical tensions would have put enough pressure on the markets to cause a major downturn. But in mid-February the coronavirus, which has been seen as a local problem in China before,

The coronavirus pandemic hit the European fund industry with declining markets and estimated net outflows of €125.9 bn in the first quarter of 2020. This trend reversed over the course of the second quarter as central banks and governments around the globe started quantitative easing programs and economic relief packages to cushion the economic drawdowns caused by the spread of the coronavirus and the lockdowns of economies around the globe. The measures taken led to a rebound of the equity markets accompanied by falling interest rates. The return to somewhat normal market circumstances led investors to buy back into mutual

Last year, as stated in our latest fund market review, was a good year for net flows into mutual funds and the overall development of the assets under management in the European fund industry. As a result, you might expect that fund promoter activity concerning fund launches, liquidations, and mergers would show that the fund industry is in growth mode. However, there was only a slight increase in the number of funds in Europe—many French asset managers closed and merged funds domiciled in France with similar funds which they launched in Luxembourg and/or Ireland to support their cross-border fund sales

Looking at the headline figures, the first nine months of 2018 seem to have been rough for the European fund industry. Even though the assets under management (AUM) (€10.7 tr) increased over the course of the year so far, the industry failed to attract significant new money. The net fund flows stood at €5.9 bn at the end of September. A closer view of the underlying trends shows that European investors have started to pull out money from bond funds and surprisingly also from money market products. The general fund-flow trends are a reaction of European investors to the recent