Germany: Equity fund inflows reach 16 year high

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Germany: Equity fund inflows reach 16 year high

Monthly inflows into German mutual funds investing in equities have reached €4.5bn in July, representing the highest levels since January 2001, according to the latest data presented by German fund industry association BVI.

About half of the new inflows reported has been invested in passive funds, further highlighting the strong growth of the passive investment industry in Germany. Overall, equity fund assets increased from €323bn to €370bn year on year, a growth rate of 15%.

Multi-asset continues to remain the second most popular asset class, attracting €2.1bn in July, followed by fixed income and property funds which attracted a mere €0.3bn respectively.

A key change compared to previous months was that mutual funds overtook Spezialfonds in terms of net new inflows. While Spezialfonds have long been the investment vehicle of choice for German investors, mutual funds now attracted €6.5bn and Spezialfonds €2.4bn.

Moreover, the trend towards outsourced portfolio management continues, about 23% of all open-ended real estate Spezialfonds and 40% of Special Securities Funds ‘s investment decisions are now being taken by an external asset manager.

According to the BVI, this is partly due to international asset managers using the portfolio management of funds as a gateway to the German market without having to set up a Kapitalverwaltungsgesellschaft. Another reason is German institutional investors increasingly outsourcing the asset management of specific asset classes such as emerging market or corporate bonds to specialised asset managers.

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