Spanish investors have been redeeming fund investments through the financial crisis, but one sector is managing to attract interest.
Many of Spain’s property funds suspended withdrawals during the financial crisis when redemption requests rose above 90%. Most of the six remaining funds are being wound down or converted into other vehicles.
Inverco, the industry’s trade association, expects net withdrawals from mutual funds to total almost €9bn for 2011, a fall of more than 60% on the previous year. The association predicts that international fund groups Aviva and DWS will post strong net flows. Local fund groups are likely to suffer the strongest outflows from non-guaranteed products.
Santander, BBVA Asset Management, Ahorro Corporación and CatalunyaCaixa Inversió should experience the biggest net outflows. At the end of November, Santander Asset Management remained the country’s largest fund group. It had a market share of 16.69%, with €21bn across 245 funds.
The guaranteed sector is a unique feature of the Spanish fund market. Investor capital is backed by issuing parent banks, typically placed into non-Ucits funds such as structured products. Funds are offered over a set maturity with payouts either fixed or variable from the outset.
Statistics from Inverco show that fixed return guaranteed funds increased their share of total AUM to 21% in the 11 months to the end of November.
Fund issuers have included equities and other instruments in their guaranteed fund portfolios to boost returns for unwrapped fund and pension investors.
Garantizados are likely to remain popular this year. Almost 200 guaranteed funds are set to mature in 2012, with a total value of €11.6bn according to VDOS, a fund analyst firm. While more maturing funds will be variable rate, maturing fixed rate products have more assets under management.
VDOS calculates that 37 BBVA products will mature in 2012. Santander, Ahorro Corporación, Units and Bankinter will also experience substantial maturities.
Chart: Fund flows in billions of euros (2011)