Germany sees highest ever flows to its Spezialfonds

Reichstag building2014 was a record year for the German fund industry, thanks mainly to an increase in institutional investment.

The industry's assets under management amounted to €2,382 billion at the end of 2014, twice as much as at the end of 2004, the German Investment Funds Association (BVI) says.

Purely institutional asset management in the form of Spezialfonds and assets outside investment funds accounted for two thirds of the 2014 volume – €1,231 billion and €363 billion, respectively.

Spezialfonds recorded the highest inflows in their history, taking in €91 billion. Insurance companies contributed €42 billion of that, followed by pension funds.

Fund companies are managing a further €788 billion in the form of retail funds.

"Never before has the German fund industry managed a greater volume of assets," Holger Naumann, president of the BVI said at a press conference yesterday.

According to Bundesbank data, the BVI says, private depositors hold financial assets in excess of €5,000 billion, of which more than two thirds are related to interest-rate products. Funds are now more attractive to investors because low interest rates make interest-rate products effectively lose value if inflation is not favourable.

Balanced funds were particularly popular with investors during 2014, collecting a record sum of €22.7 billion net, and bond funds made second place.

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