Number of European funds shrinks for second year running
The number of funds available to European investors fell for the second consecutive year in 2010, as managers shut and merged away more products than they launched new ones.
Lipper, which collected the data, said the merging of funds reflected the effect of the Ucits directive facilitating the consolidation of portfolios.
The strong trend of consolidation evident last year, when 1142 funds were merged away, continued last quarter as a further 230 portfolios were consolidated, said Lipper.
More funds were merged or closed down (2916) last year than new ones opened (2872). It was the second consecutive year this happened.
From 2006 to 2008, launches easily outpaced the combined number of closures and mergers.
Last year, equity funds accounted for about one third of all industry consolidation.
Over the same period, the number of new products fell to a five-year low.Last year’s 2,872 new funds is far below the peak launch years of 2007 (when 4,327 funds were launched) and 2008 (3,702 new funds).
Last quarter the number of newly launched funds also fell, to 500 from 716 in the first quarter of 2010.
The most popular strategies to start last quarter were guaranteed funds, mixed-asset flexible funds and Ucits funds using alternative strategies.
By the end of March, Europe’s 31,493 funds were made up predominantly of equity strategies (38%) and mixed asset funds (23%). Bond funds comprised 17%. The rest included a broad array of strategies, from property to commodities.