Spezialfonds most popular funds in Germany, BVI reveals

Fund flow data from Germany’s trade body BVI for September highlights the important of Spezialfonds for local investors.

Some €2.7bn was invested in Spezialfonds in September, making them the most popular investment vehicle in Germany. This money came predominantly from institutional allocators.

Total inflows into German funds in September amounted to of €4.5bn inflows, so Spezialfonds account for 60% of the inflows.

Year to end of September, institutions have allocated a total of €43bn to Spezialfonds. This is more than double the figure for the same period last year, which highlights the growing importance of this investment vehicle for German institutions.

Most of the €1.9bn allocated to public funds in September has gone into bond funds and mixed products. For mixed funds the inflows of €800m mark the strongest monthly net inflows since November 2010.

Equities, on the other hand, are €600m net down on the previous month. This is a sign of the continuing risk adversity of investors across the Eurozone, especially in conservative countries with regards to the investment strategy, such as Germany.

However, European equity funds have actually seen inflows of €300m in September, despite the losses experience in other geographical segments of the asset class.

Thus, despite the general trend to avoid risks, investors seem to have been encouraged by the possibility of improvements in the Eurozone.

Mario Draghi’s promise to buy unlimited quantities of short-term European debt to help the economy out of the crisis has undoubtedly contributed to the improvement in sentiment. When the announcement was made in early September, the equity market reacted with a rally.

Research by Fitch Ratings last month revealed net inflows into around a third of European equity funds in the 12 months to October.

At the end of August, assets under management in European equity funds had reached €330bn and have remained fairly stable year to date, as outflows have been offset by good market performance.

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