Fund houses axe fewer funds as record assets flow in

AxeLess pressure on profits in the European funds industry due to record assets may have contributed to a slowdown in the rate of funds being withdrawn from the market, researchers say.

Liquidations last year fell 7% and were at their lowest rate in five years, said Thomson Reuters Lipper, while fewer funds were merged.

This potentially signals the reversal of a trend for the European funds industry to reduce the number of funds available for sale over the past five years as firms rationalised their product ranges through liquidations or mergers to save on costs.

The record-high inflows into mutual funds that led to a new all-time high in assets under management at the end of 2015 “might have eased profitability pressures for fund promoters and therefore slowed the overall consolidation process,” said Detlef Glow and Christoph Karg in a ‘Lipper European FundMarket Insight Report’ for the final quarter of 2015.

The number of European funds available to investors still fell by 538 in 2015 due to liquidations or mergers, leaving 31,931 funds registered for sale in Europe.

Although last year saw the lowest number of launches in the past five years, the trend for fewer launches has also slowed.

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