German funds have strongest monthly business growth for two years

Germany’s fund industry took in about €12bn of new business in February, the highest monthly figure since January 2010 as the strong market rally continued.

Institutional investors dominated the buyers list, by adding €7.8bn to Spezial funds and €3.4bn to wealth held outside official fund structures.

Mutual funds most often used by private investors, by contrast, took in just €700m, according to statistics from Germany’s fund management trade body Bundesverband Investment und Asset Management.

This growth, plus appreciation in value, helped the industry grow from managing €1.822trn in January to €1.859 a month later.

For mutual funds sales, fixed income products had €1.2bn in February, while corporate bond funds had €2.3bn, and emerging markets fixed income funds had €800m.

Thomas Richter, head of the BVI, said: “In light of the debt problems of Greece and low rates for European sovereign paper, many investors hold corporate bonds as more attractive than sovereigns.”

Open property funds and multi-asset funds had inflows of €400m and €200m respectively in February.

However, €600m outflows hit funds whose managers protect value in various ways, though it should be noted about half this figure came from planned return of cash as funds matured.

In total, German fund managers ran €1.9trn at the end of the February, with about €1.2trn coming from institutional investors.

The statistics from the BVI also showed a stark north/south divide emerging in Europe, with fund industries in Germany, the UK and Scandinavia all growing, while France, Italy and Spain contract.

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