French fund market plummeted in 2011, says Lipper
France saw substantial asset declines in equity and money market funds last year pinning it to the bottom of the rankings (33rd) for the second year running in Lipper’s review of European asset growth by market.
France saw substantial asset declines in equity and money market funds last year pinning it to the bottom of the rankings (33rd) for the second year running in Lipper’s review of European asset growth by market.
In 2011 assets in French equity funds dropped €32.1bn, money market funds €31.7bn and bond funds €11.6bn.
Overall French assets decreased in every asset class except property (which saw zero asset growth) bringing the total decline in French assets to €96.9bn.
This drop is largely attributable to poor sales figures in France. Only eight of 32 European countries saw positive net sales last year, but outflows from French funds were by far the most severe at €64.8bn.
Outflows from France were nearly double those from the next most stricken market, Italy, which saw just €34.3bn of outflows.
France nearly single-handedly accounted for outflows from the entire European market, which saw €70.5bn of redemptions.
France and Germany were the only countries to see redemptions from every asset class, concentrated most heavily in France from money market funds (€33.8bn) and equity funds (€11.2bn).
The least affected asset class in France was property, which saw just €8m of outflows. This was also the least affected asset class across Europe, witnessing just €3.1m of outflows overall, an indication of property’s safe haven appeal when markets get tough.
Despite the decline in assets, France remained the second largest country in Europe in terms of assets, home to €572.8bn. The only country with greater assets was the UK, host to €702.4bn.
According to Ed Moisson (pictured), author of the Lipper report, it makes sense that France, one of Europe’s largest markets in terms of assets, also saw the heaviest outflows. “The more assets you have, the more you have to lose,” he explained.
This does not account for the disparity between the French and UK markets, however. These are the biggest markets in Europe but they experienced very different sales stories last year. While France saw €64.8bn of redemptions, the UK received €68.9bn in estimated net sales.
Moisson believes French institutions, which normally invest heavily in money market funds, may have switched their assets into depositaries instead.
Assets in both of these markets were dwarfed by assets in international funds – €2.25trn – which witnessed estimated net sales of €45.9bn last year.
International funds have attracted investment over the past decade due to the surging popularity of cross-border Ucits funds in Europe and beyond.
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