Total assets under management in the European fund industry fell to 14.5 trillion euro at the end of the first quarter from 15.3 trillion at the end of last year, according to the latest European Fund Markets Report by Refinitiv Lipper.
The negative performance of the underlying markets contributed negative 696.4 billion euro to the decline over the quarter, while estimated net flows summed up to negative 88.6 billion euro by the end of March.
“It was not surprising that Q1 2022 was in general a negative quarter for the European fund industry given the geopolitical situation in Europe, the still ongoing Covid-19 pandemic, and the sluggish market environment,” said Detlef Glow, Head of EMEA Research at Refinitiv Lipper.
Money market funds faced outflows of 113.6 billion euro during the first quarter, while long-term products saw overall inflows of 25 billion euro in the period. With an increase of 32.1 billion euro, mixed assets were the best-selling asset type for the first quarter, said Refinitiv Lipper.
‘Somewhat surprising’
“Within this market environment and given the economic uncertainties, one would expect that European investors sold long-term funds and bought money market products,” Glow said. “Therefore, it is somewhat surprising that European investors sold money market products, which are normally considered safe-haven investments, while long-term products enjoyed overall inflows.”
For comparison, Luxembourg’s supervisor CSSF reported on 29 April that the total assets under management in Luxembourg stood at 5.56 trillion euro at the end of March, down from . This shows that Luxembourg accounted for some 38 percent of all assets under management Europe at the end of March.
Refinitiv Lipper said in its latest report that 37.1 percent of the total assets were held by ESG-related funds. Of these the majority, approximately 3.8 trillion euro, were held in mutual funds and ETFs aligned to article 8 of the European sustainable finance regulation.
With 6.1 trillion euro, equity funds held the majority of assets, followed by bond funds, which accounted for 3.3 trillion, mixed-assets funds with 2.6 trillion, money market products with 1.4 trillion, alternative UCITS funds at 700 billion, real estate funds at 300 billion.
In more detail, 2.5 trillion of the assets in equity funds were held by ESG-related funds, while €1.3 trillion of the assets in bond funds were held by ESG-related funds. These two classifications were followed by mixed-assets funds, for which 900 billion euro were held by ESG-related funds. Within money market products, 600 billion were held by ESG-related funds.
In the segment of alternative UCITS funds, some 100 billion euro were held by ESG-related funds and 100 billion were invested in ESG-related real estate funds.