ETFs beat equity funds in Lipper sales league

Two exchange-traded funds have beaten equity funds to become the best-selling equity funds, according to Lipper’s European Fund Market Review.

The two funds are the iShares Dax and the DB X-Trackers DJ Dax, which sold €8.4bn and €4.1bn respectively.

The success of the ETFs, says Lipper, “must surely reflect institutional activity”. ETFs make up 7.8% of equity fund assets in Europe. When this total is combined with traditional index tracking funds, passively managed products make up 16.8% of the total. This is a rise from 8.8% at the end of 2006 and 5.5% at the end of 2001, when ETFs had first arrived in Europe.

The third best-selling fund is a Luxembourg-domiciled Nomura Multi-Currency Japan Stock Leaders fund (€1.7bn).

The best-selling actively managed equity fund is the Morgan Stanley Global Brands fund, which came fourth with sales of €1.7bn, followed by the Aberdeen Global Emerging Markets Equity fund, in fifth place with sales of €1.6bn.

On the bond side, Franklin Templeton and Pimco continue to dominate, providing “products against which major players measure their success”. The two top selling funds are the Templeton Global Total Return (with sales of €5.9bn) and the Templeton Global Bond (€4.9bn). Pimco takes third and fourth places with the Pimco GIS Global Inv Grade Credit (€2.3bn) and the Pimco GIS Unconstrained Bond with €1.8bn.

The top four are all global currencies funds. Close behind them in fifth is the Muzinich Short Duration High Yield fund, a USD Short-Term fund with €1.7bn.

The most successful group in 2011 is BlackRock, which generated most net sales (ex-money market) with €14.3bn, much of which is due to its leadership in the ETF sector. Stripping out ETFs, Franklin Templeton becomes leader, with €12.6bn.

Among other highlights of the report, last year saw a small reduction in the number of funds for only the second time in the past decade. Lipper says the industry has grown by 74% over the past ten years, with nearly half of industry assets (46%) now in funds launched over the past decade (made up of 24% launched in the first five years and 22% launched in the most recent five years).

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