Institutional investors drive German fund flows

Berlin bundestagInstitutional investors kept German fund flows in positive territory in February, while retail investors cashed out of the market.

The German fund industry attracted net inflows of €5.5 billion in February, with the vast majority of new money invested in ‘spezialfonds’ – vehicles exclusively accessible by institutional investors.

The figures, released by German fund industry association BVI, indicate spezialfonds attracted inflows of €6.9 billion, while retail funds suffered outflows of €1.5 billion. Retail investors have turned negative following just €0.5 billion of investments that were made in January.

Open-ended real estate and multi-asset funds saw the highest sales, receiving positive inflows of €0.9 billion and €0.4 billion respectively, while equity and bond funds reported outflows of €0.7 billion and €1.8 billion.

Spezialfonds split their portfolios into several segments, which are often managed by different portfolio managers according to asset category and area of expertise. These vehicles have become increasingly popular in Germany in recent years, with total assets held reaching a record €935 billion last year, up from €848 billion in 2014.

Overall, the German fund industry has attracted inflows of over €22 billion since the start of the year. As of the end of February, German funds managed assets of €2.6 trillion.

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