Europe's fund industry contracted by 722 funds in last year's challenging market climate, including shrinkage of 325 in the last quarter alone, as the total number of launches fell to its lowest level for five years.
Europe’s fund industry contracted by 722 funds in last year’s challenging market climate, including shrinkage of 325 in the last quarter alone, as the total number of launches fell to its lowest level for five years.
Over the year managers launched just 2,749 funds, and closed down 2,028 and merged 1,443.
In the final quarter they launched 571, but closed 659 and merged 237.
Lipper, which provided the data, pointed to managers responding to EU-passport policies, Ucits IV regulation including document requirements, and “the demand to distinguish real money market products from products with a similar targeted performance but different underlying securities” as reasons behind the consolidation.
While many European allocators predict multi-asset funds will be popular this year, last year managers liquidated 326 of them, but also launched 668.
Allocators now have 31,690 mutual funds to chose from in Europe. Luxembourg is home to the largest portion (8,257), followed by France (4,735).
Despite equities falling by 10% last year this category of mutual funds still dominates in Europe with 38% of all funds available, followed by mixed-asset funds (24%). bond funds (17%), and money market funds (5%). Real estate, commodity, guaranteed, and funds of hedge funds make up the remaining 16%.
The numbers of fund launches, and liquidations, last year broadly followed this order as well.