The German fund industry reached €4,311 billion in assets under management by the end of June 2024, according to BVI, the German funds association. Over the past decade, the industry’s assets have nearly doubled, reflecting an average annual growth rate of just under 7%.
The majority of these assets, €2,133 billion, were held in open-ended Spezialfonds ( German fund structures for institutional investors). Open-ended retail funds accounted for €1,490 billion, while discretionary mandates and closed-ended funds managed €630 billion and €58 billion, respectively. Despite the overall growth, there was a net withdrawal of €15.7 billion from discretionary mandates in the first half of 2024.
Retail funds attracted €11.7 billion in new investments during the first half of the year. Bond funds led the inflows with €10.9 billion, particularly those investing in short-term bonds with up to three years remaining. Equity funds followed with €6.8 billion in new investments. Notably, equity ETFs saw a significant inflow of €9.5 billion, contrasting with a €2.7 billion outflow from actively managed equity funds. However, balanced funds and property funds faced challenges, with outflows of €6.4 billion and €2.1 billion, respectively.
German fund industry grew by 9% year-on-year, shows BVI data
The decline in net fund assets has been ongoing for eleven consecutive months, with net assets falling from €131 billion to €127 billion since the beginning of the year, partially due to the devaluation of properties in some portfolios. Despite this, equity funds have shown robust growth, increasing their share of retail funds’ AuM to 47%, equivalent to €697 billion.
In the institutional sector, retirement benefit schemes, including pension funds, dominated the open-ended Spezialfonds, managing €753 billion. This represented a 45% increase since mid-2019, driven by substantial inflows. Insurers, the second-largest group, managed €524 billion in these funds, although their assets have decreased over the past five years due to the impact of rising interest rates on bond valuations.
Closed-ended funds managed by BVI members, which have grown from €12 billion to €58 billion in the last five years primarily driven by private equity, accounted for 43% of the sector. Institutional investors dominate this market, with Spezialfonds managing 95% of the assets, while closed-ended retail funds remain focused mainly on property investments.
