European investors were generally in a risk-on mode over the course of 2021 which could be seen by the fact that equity funds were the best-selling asset type overall. In fact, 2021 was a superb year for the European fund industry as the promoters of mutual funds and ETFs enjoyed record inflows (€724.1 bn) over the course of 2021. These inflows come 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 2021 was the second year in a row

Fees and expenses in the mutual funds industry are a hot topic for investors and market observers around the world. In some cases discussions are going so far that one could get the impression that fees and expenses are the only criteria an investor should use when selecting a mutual fund or ETF. These discussions have recently been fueled by media coverage of the launches of some low-cost funds by large asset management groups. Fees and expenses, especially for actively managed funds, have been under scrutiny for a while, since a large number of actively managed funds have not beaten

Within the European fund industry calculation of fund flows is quite common, since market observers, fund associations, and even fund promoters publish and comment on these numbers to showcase the success of the fund industry and/or single products and to comment on current trends in Europe. But for fund promoters it is often a riddle as to why investors are buying a specific fund, given its performance. That said, a few companies—mainly consultants—look behind the scenes at the fund level to try to determine the main drivers of fund flows to help their clients gain inflows to their funds. With

In discussions about whether active or passive funds are the better choice for an investor, performance statistics are often used to show that active management is a loser’s game, since the majority of active managers are not able to beat their benchmark after costs. Although this argument is probably right and despite the fact some active managers are able to produce consistently superior returns, this headline view doesn’t give all the reasons to prefer one fund over another. From my point of view it is important to look beyond the headline numbers to understand if one investment vehicle has a