The European fund industry is likely to see more funds closed or merged over the next few years as asset managers increasingly focus on the profitability of their funds.
Lipper data shows that the number of fund mergers increased by 25% to 318 funds in the third quarter of this year, although there has been a 30% slowdown in fund liquidations to 324 funds.
Of the funds that were merged, there were 93 equity funds, 102 bond funds, 84 mixed asset funds, five “other” funds and 34 money market funds.
Of those that were liquidated, there were 94 equity funds, 63 bond funds, 72 mixed asset funds, 71 funds fell into the category “other” and 24 were money market funds.
“That might be an indicator the industry has already liquidated the funds that are no longer in the favour of investors,” Lipper notes in its latest Fund market insight report.
“We also expect the chase for returns to be a driver for future growth in terms of new funds, since investors are looking for investment vehicles that can deliver the returns they need to fulfil their obligations.”
Even though the number of newly launched funds was down in the quarter, Lipper predicts more product launches once the market environment becomes friendlier.
Multi-asset funds are tipped to become particularly popular, which Lipper says are currently in investors’ favour.
Over the quarter, 429 funds were launched – 149 equity funds, 120 bond funds, 117 mixed asset funds, 38 “other funds” and five money market funds.
The quantity of newly launched funds was similar to that over the same time last year, but a 43% decrease from the peak in 2010.
These new launches bring the total number of funds available for sale in Europe at the end of September to 31,997 funds.
Luxembourg hosts 8,836 of those, followed by France with 4,761.
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