Efama

TINA - There Is No Alternative - is gone. That’s not a bad thing. And don’t write off the 60/40 portfolio just yet. And the asset management industry has had a clear impact on society and sustainability.

European Fund and Asset Management Association Efama will host its 2022 Investment Management Forum on Thursday and Friday in Brussels. Director-general Tanguy Van de Werve spoke to Investment Officer about prospects for the industry, sustainable finance as the new normal, persistent pressure on costs, and the need for financial education. 

Europe’s fund and asset management industry, seeing rapid growth in investor demand for sustainable products, is asking EU policymakers for a robust and transparent new legal framework that clearly defines how ESG and sustainability ratings for investment products are determined.

Rising inflation, the tightening of monetary policy, Russia’s invasion of Ukraine, and the resulting risks to economic growth have caused sales of investments funds defined as Undertakings for Collective Investments for Transferable Securities, or Ucits, to turn negative in the second quarter, according to the European Fund and Asset Management Association, known as Efama.

One month after the EU ordered the investment sector to ask clients for their sustainability preferences, investment firms appear to show limited enthusiasm for complying with the new requirements as complexity around the EU’s ESG rules persists and greenwashing fears linger.

European investment funds continued to experience net outflows for a sixth consecutive month as investors withdrew twice as much from Ucits and alternative investment funds during June compared to May, according to the European Fund and Asset Management Association, Efama. 

Net sales of Ucits and AIF funds registered net outflows of 72 billion euro, compared to net outflows of 36 billion euro in May, the association said. Ucits recorded net outflows of 69 billion euro, compared to net outflows of 33 billion euro in May.

Calls for the global alignment of sustainability reporting standards is being complicated by differences of views about which standards to back between those developed by the European Union and a competing private sector standard backed by the well-known IFRS accounting standards organisation.

European bond funds experienced a fifth straight month of net outflows in May as inflation continued to rise and markets anticipated tightening of monetary policy in Europe and the United States, according to data on 29 countries posted by the European Fund and Asset Management Association, Efama. 

Europe’s asset management industry on Wednesday called on governments across Europe to take additional actions such as introducing new tax incentives to protect retail investors and savers against inflation. 

Net assets of worldwide investment funds decreased by 2.5 percent in the first quarter as the decline in the United States and Europe was only partly offset by net inflows in the Asia-Pacific region, according to the latest International Statistical Release published by the European Fund and Asset Management Association, known as Efama. Bond and money market saw strong net outflows during the first three months, although China bucked the with rising inflows for money market funds.