Raymond Frenken

In a significant market trend, European fund investors are increasingly redirecting their investments towards larger, passively managed mutual funds and ETFs, at the expense of actively managed smaller ones. This strategic shift has ignited a sustained downward pressure on costs across various fund types and strategies, according to the latest insights unveiled on Monday by the prominent European fund sector group Efama.

As global financial hub known for its robust banking and investment industry, Luxembourg is awaiting an upcoming discussion at the Financial Action Task Force (FATF) on its anti-money laundering (AML) measures. The FATF, the international body responsible for combating money laundering and terrorist financing, will discuss the findings of its latest mutual evaluation assessment of the grand duchy next week in Paris.

It is not easy for Luxembourg, home to 5,139 billion euro in international fund assets at the end of April, to maintain its international leadership as cross-border funds centre.

Competition between Luxembourg and Ireland, Europe’s other international funds hub, is a topic that re-emerged on two separate axes this week in our coverage at Investment Officer.lu.

The negative correlation between bonds and stocks is no longer a certainty due to structurally higher inflation expected in the coming decade.

More exposure to low-volatility European equities, high quality bonds in the U.S. and a bit in liquid hedge funds, and less to high quality European corporate debt, lower quality corporate bonds and gold. These are the portfolio shifts Luxembourg-headquartered Quintet Private Bank advises to its clients in its latest midyear investment outlook.

A stellar performance of a small number of listed tech companies is largely responsible for the recent recovery in public stock markets. For Ben Prade, partner at international tech investor GP Bullhound, it remains to be seen whether this can serve as a full market revival. Nevertheless, he is upbeat about the prospects for private tech investments, saying 2023 can become “one of those really great vintages”.

Luxembourg banking association ABBL on Monday said it sees the EU’s new retail investment plans as “controversial”, warning that the package that aims to prioritise consumer interests and strengthen investor protection “may have unintended consequences” and could distort the investment sector.

Swiss private bank Pictet has decided to move its European headquarters to Frankfurt, relocating the function from Luxembourg. The grand duchy has served as the main European hub of the Geneva-based private bank for about three decades.

The  bank said that its former Pictet & Cie (Europe) S.A. “transferred its registered office from Luxembourg” to Frankfurt per 26 May “by way of a cross border conversion from a Luxembourg Societé Anonyme into a German Aktiengesellschaft.”

Europe’s top financial regulators on Thursday presented a first official definition of greenwashing as part of a common approach for cracking down on greenwashing practices among banks, asset managers and insurance companies, turning up the pressure on an industry that has for a long time been complaining about the lack of clarity of the EU’s sustainable finance regulations.

In an age where financial success often overshadows our responsibility towards the environment and society, there is a growing need for investment strategies that align with our values and contribute to a sustainable future. Enter the terrAssisi Equity Fund, a unique investment initiative that draws inspiration from the timeless values of Saint Francis of Assisi, blending financial acumen with ethical considerations.