The collective value of Luxembourg investment funds has plunged more than 800 billion euro from record levels reached a year ago as inflation, rising interest rates and the war in Ukraine took their toll on assets domiciled in the grand duchy.
At the end of December, the collective asset value of Luxembourg’s Undertakings for Collective Investments, or UCIs, stood at 5,028 billion euro, down 831 billion euro, or 14.2 percent, from the record 5,859 billion reported for December 2021, according to the official statistics, reported on Monday by financial supervisor CSSF.
The decline stems from a depreciation of asset values in combination with the balance of fund in- and outflows.
The statistics show that Luxembourg was home to 3,377 funds that qualify for the definition of UCI under its 2010 law, down 3.3 percent from 3,492 such funds at the end of 2021. The bulk of these - some 1623 funds - were traditional Ucits funds, often held by private investors across Europe. The number of Specialised Investment Funds, or SIFs, fell to 1318 funds. These are mostly real estate funds held by professional investors. The remainder consisted of Part II UCIs and Sicar funds, the numbers of which also declined.
UCI fund numbers lowest in more than a decade
At 3377 funds, the collective number of UCI, SIF and Sicar funds registered in Luxembourg now has fallen to the lowest level in more than 10 years, according to historical data reported to the CSSF. The number of alternative investment funds meanwhile has increased considerably in recent years.
A total of 2,199 entities adopted an umbrella structure representing 13,144 sub-funds, according to CSSF. Adding the 1,178 entities with a traditional UCI structure to that figure, a total of 14,322 fund units were active in the financial centre, it said.
With the exception of Euro money market funds, all fund categories reported declining values during December. Money market funds were up 0.09 percent. The biggest declines for December were reported for US equity funds (down 7.4 percent), Latin American equities (down 5.7 percent) and global equity funds (down 4.9 percent).
In December alone, Luxembourg’s UCI industry registered a negative variation amounting to 137.9 billion euro. This decrease represents the sum of positive net capital investments of 7.65 billion euro (+0.15% vs November) and of the negative development of financial markets amounting to 145.5 billion euro (-2.82%), according to CSSF.
Development of Undertakings for Collective Investments:
