Efama: Record fund sales driven partly by investor protection

growthNet sales of Ucits and of non-Ucits funds increased by more than €200 billion last year, setting a record high with €601 billion in net inflows.

Net sales of Ucits funds nearly doubled, reaching €463 billion compared to €243 billion in 2013, according to the latest figures from the European Fund and Asset Management Association (Efama).

Bernard Delbecque, Efama director of economics and research, says investor protection offered by investment funds is one of the main reasons why sales were so high.

The sales helped drive assets under management from €9.8 trillion to €11.2 trillion.

Bond funds were the biggest sellers, with net sales of €198 billion compared to €79 billion in 2013. However, demand dropped in December. Delbecque says: "For the first time in 2014, demand for bond funds turned negative in December in a historically low interest-rate environment where investors are searching for higher yield and protection against interest rate risk."

Balanced funds hit record levels in 2014, with full-year net sales of €186 billion, showing investor interest in the promise of asset diversification and risk reduction.

Equity funds lagged with net sales of €55 billion, a reduction on sales of €97 billion in 2013.

December 2014 was a difficult month across the board, with Ucits funds recording net outflows of €12 billion, driven by redemptions from fixed-term funds during the month. This marked a downturn from the net inflows of €27 billion into Ucits funds in November.

Delbecque says that the positive flows in 2014 can also be explained partly by the quest for investment returns in a low-rate environment.

Efama uses data from 27 associations representing more than 99.6% of total Ucits and non-Ucits assets.

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