The number of cross-border funds registered globally recorded its slowest growth since 2009 last year. At the same time, however, Luxembourg strengthened its position as leading global fund hub according to the PwC Luxembourg Global Fund Distribution survey.
‘We see a notable, and probably expected, decline in the launch of new funds versus previous years,’ noted Robert Glover, Partner, Global Fund Distribution at PwC Luxembourg. ‘As asset managers put the brakes on expansion plans, for both new funds and new jurisdictions, efforts were concentrated on developing their distribution footprint with existing products and in mature markets.’
The number of globally registered cross-border funds increased by only 97 funds to hit 14,128. But the total number of fund registrations grew faster, and now stands at 128,520. On average, a cross-border fund is now registered for sale in 9.1 countries.
Luxembourg expanded its lead over Ireland as the largest international fund registration centre, registering 467 new funds in 2020, a 1.1% increase over 2019. Runner-up Ireland saw a mere 143 new registrations, an increase of 0.8%. The news comes only days after the Luxembourg national football team’s glorious 0-1 victory over Ireland in Dublin in a World Cup qualifier. The Grand Duchy now accounts for 57% of global cross-border fund registrations, with Ireland a distant second with 33% market share. Luxembourg-domiciled funds are now distributed in 79 countries compared to 59 countries for those domiciled in Ireland.
Portugal fastest grower
Luxembourg was not the fastest-growing fund centre in 2020 though. Instead, Portugal experienced the largest increase in the number of new registrations with 749 new registrations in the country. This increase reflects investor demand for ETFs in the country with 637 ETFs being registered in 2020 alone.
Germany remains the most important distribution market for Luxembourg, with Luxembourg-domiciled funds accounting for 6,149 fund registrations in the country. The top-5 for Luxembourg is completed by Switzerland, France, the UK and Spain. Outside Europe, Chile (857 fund registrations), the UAE (251) and Peru (227) are the most important markets for Luxembourg-domiciled funds.
As far as asset managers are concerned, US asset managers Franklin Templeton and Fidelity Investments retain the biggest global fund distribution footprint, with fund registrations in 59 and 47 countries respectively. All of the 10 largest fund distributors have Luxembourg as their top-domicile, confirming the Grand Duchy’s leading position as a fund hub.