German fund industry has one of best years ever

Germany’s fund industry grew net funds by Eur87.1bn last year, marking “one of the best years in its history,” according to fund trade body, Bundesverband Investment und Asset Management (BVI)

Last year’s growth fell just shy of the record Eur87.8bn in 2005, but was a stark improvement on Eur54.5bn in 2009, and a Eur12.9 contraction the year before.

Last year, all but one major fund category grew last year, with equity funds doing best.

European equity funds grew by 10.6%; global equity funds increased 15.1%; German equity products grew 17.1%; emerging markets products swelled by 22.1%; and natural resources/energy equities funds grew by 35.1%.
Only open real property funds contracted, by 1.3%.

The ‘spezialfonds’ structure – akin to segregated accounts – took in a record Eur70.9bn of new money, topping the previous Eur68bn record set in 1998.

The BVI also noted ETFs now run Eur8.6bn, almost as much as the Eur10.7bn in actively managed public funds in Germany.

Announcing the annual inflows today, the BVI said investor protection stood was top of its agenda for 2011.

New rules planned for open-ended real estate funds look to achieve the goal of improving the ability to counter liquidity squeezes, it said, adding to stability and winning greater trust from investors.

“Private investors will be the winners of this reform,” said Stefan Seip, BVI managing director.

His colleague Rudolf Siebel, welcomed the introduction, from 1 July, of key information documents (Wesentliche Anlegerinformation), imparting important decision-making data in standard format.

“The next step should be, in our view, making it possible to compare different investment products on the basis of the KIDs,” Siebel said.

Thomas Richter, BVI chief executive, stressed the importance of long-term investing.

People must get away from the idea of ‘apparent security’, he said, “because the certainty of a short-term guarantee equates to the certainty in the long term, that one will fall short of an adequate level of provisions”.

To strengthen Germany’s pension system the BVI called for equitable tax treatment of long-term investing; the ability to pool pensions; and broadening of provisioning for old age.

Overall Deutsche Bank, through its various asset management units, maintained its leading market share in mutual funds (excluding open real estate products), with 24.1%.

DekaBank (16.7%), Allianz Global Investors Deutschland (16.3%), and Union Investment Group (13.9%) followed.

BlackRock Asset Management Deutschland (3.6%) and Pioneer Group (1.8%) were leading groups headquartered outside Germany.

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