Germans offload fund holdings in 2011, but hope glimmers for multi-strategy

Germans did not favour one fund strategy much over another last year – they sold every one of seven investment categories monitored by Lipper – but only modest selling of multi-strategy products masked a growing popularity as the year progressed.

France was the only other one of 32 European countries to make net redemptions from every fund category – equities, bonds, money market and enhanced money market, property, mixed funds, and ‘other’.

From ranking sixth in 2010 on the basis of net fund sales, Germany slipped to thirty first, with net withdrawals of €22.16bn. Only Italy (€34.29bn net redemptions) and the French (€64.79bn) withdrew more.

However, allocators pointed to growing momentum behind mixed funds. Germans pulled a relatively mild €126.5m from these portfolios.

Across all of Europe, about €7.3bn of net new money actually flowed into these funds.

Andreas Gruenewald, head of Germany’s Union of Independent Wealth Managers, said the multi-strategy concept was gaining momentum last year – despite the modest full-year net redemptions

“In the years around the turn of the century – 1999 and 2000 – as shares and leveraged products shot upwards, many people said, multi-asset wealth preservation funds are simply too boring on grounds of their performance. I am active as a wealth manager myself and my business has managed such a fund for more than a decade.

“We experienced times when such ‘mixed funds’ absolutely were not requested. Institutional investors wanted clear building blocks, and to take care of asset allocation themselves. But now the topic of ‘mixed funds’ is coming up more and more, and the products are in strong demand again.”

The popularity of funds with an element of asset allocation was also evident by Germany keeping third place in the fund of funds market, with €37.4bn contributed to Dachfonds.


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