German industry books highest inflows since 2007

German_equationThe German investment fund industry has recorded its highest half-year net inflows since 2007, according to data released today by the German trade association, the BVI.

Investors committed €40.5bn of new money to investment funds covered by the BVI in the first half of 2010, compared with €12.9bn last year and €26.8bn in 2008. The 2007 figure was €52.7bn.

The new money principally came from institutions, who committed €23.7bn to Spezialfonds, a German vehicle specifically designed for institutional investors. Retail funds (Publikumsfonds) attracted net inflows of €10.5bn, with the remainder of the inflows (€6.6bn) going to portfolios not constituted as investment funds. The BVI started including such portfolios in its data as of 30 June 2010.

Balanced funds dominated retail inflows, attracting €9bn. German balanced funds invest in a mix of equities and fixed-interest securities as well as property in some cases, and the BVI ascribed their popularity with retail investors to their ability to offer security alongside the potential to profit from equity markets.

Also popular with German retail investors were bond funds, which attracted net new inflows of €5.4bn. In the wake of carnage in the eurozone, US dollar-denominated funds proved a particular winner, drawing in €4.5bn.

‘Near money market’ short-term bond funds, meanwhile, saw significant outflows of €3.7bn, and investors also withdrew €7.6bn from money market funds proper. Escape from the euro was again a strong theme; classic euro money market funds saw net outflows of €5bn, while the figure for more risk-oriented euro money market funds was €2.2bn.

Both retail and institutional investors in Germany reaffirmed their confidence in the open-ended property funds that form a significant part of the German fund industry (6.6% of assets under management at 30 June 2010) in the first half of 2010. Despite a wobble in May, when open-ended property funds saw net outflows of €1.4bn, net inflows to the sector for the half year were positive at €2.7bn.

Overall, the German industry’s AuM totalled €1,750.6bn at 30 June 2010. Retail funds accounted for €670.4bn of this and institutional funds for €763.1bn. A further €317.1bn was attributable to non-investment fund portfolios.

Fiona Rintoul, Editorial Director
©2010 funds europe