Report highlights key developments in the European fund industry over the last ten years with a special focus on 2021
The European Fund and Asset Management Association (EFAMA) has released its 2022 industry Fact Book.
The 2022 Fact Book provides an in-depth analysis of trends in the European fund industry, with an emphasis on what happened in 2021. It also includes an extensive overview of the regulatory developments across 28 European countries and a wealth of data.
Key highlights for 2021:
- Record net sales of long-term UCITS – More than EUR 40 billion of long-term UCITS were purchased each month in 2021. This led net sales of UCITS to an all-time record of EUR 812 billion.
- Record net sales of equity UCITS – Equity funds attracted more than half of total UCITS net inflows in 2021, as investor confidence was boosted by positive growth prospects and buoyant stock markets.
- Low net sales of AIFs – AIFs net sales dropped to EUR 75 billion, compared to EUR 187 billion in 2020, mainly because of the decision taken by several large Dutch pension funds to stop managing their assets within AIF wrapper structures and instead make use of segregated mandates.
- Growth in sustainable UCITS – Net assets of sustainable UCITS funds reached EUR 3.1 trillion at the end of 2021, which increased the share of sustainable funds in the total net assets of UCITS to 24%. Net assets of SFDR Article 8 funds totalled EUR 2.6 trillion, while SFDR Article 9 funds reported EUR 491 billion of net assets at the end of 2021.
EFAMA’s Director General, Tanguy van de Werve commented: “Beyond providing in-depth analysis of recent trends in the European investment fund industry, this year’s edition of the Fact Book analyses several issues highly relevant for our industry, including the current limitations of the Sustainable Financial Disclosure Regulation (SFDR), the review of the ELTIF regulation, the opportunity cost of saving excessively in bank deposits, as well as some proposals to amend the money market funds regulation. We hope that these analyses will contribute to a better understanding of the structural and regulatory environment that affects the outlook for the industry.”
Additional key findings on the demand for investment funds and longer-term trends in the industry include:
- Sustained demand for funds by European investors – Net assets of UCITS and AIFs owned by European investors amounted to EUR 16 trillion at the end of 2021, compared to EUR 6.1 trillion in 2011, an increase of 150% over 10 years.
- Investors outside Europe are major clients of the European fund industry – The net assets of European funds owned by non-European investors rose from EUR 1.6 trillion in 2011 to EUR 4.7 trillion in 2021, confirming the popularity of UCITS in Asia and South America. Over the last 10 years, the net sales of funds sold outside Europe averaged 34% of total fund net sales, compared to 33% for cross-border funds sold in Europe as well as for domestic funds.
- Institutional investors dominate – Insurers and pension funds are by far the largest investors in Europe. At the end of 2021, they held approximately EUR 6.5 trillion of UCITS and AIF net assets. Other Financial Institutions, which are in large part long-term investment funds, increased their fund holdings to EUR 4 trillion at the end of 2021, whereas fund holdings by European households increased to EUR 3.9 trillion in 2021.
- The cost of UCITS continued to fall in 2021 – During the period 2017-2021, the average cost of actively managed equity and bond funds decreased by 9% and 11%, respectively. This trend is expected to continue in the future, as increased transparency on fees and pressure from passive funds will remain in force.
- The share of passive funds is on the rise – Net assets of UCITS ETFs rose from 7.2% of long-term UCITS net assets in 2017 to 10.7% at the end of 2021. The share of index funds also grew over the same period, from 6% to 8%.
Download: 2022 industry Fact Book
About the Fact Book
The Fact Book is one of EFAMA’s flagship publications. For the first time ever, a digital version of the Fact Book will be made freely available on the EFAMA website. An Excel-based statistical package, containing more than 50 tables with historical time series on net assets, net sales and number of UCITS and AIFs at the country level, is available for purchase.
About the European Fund and Asset Management Association (EFAMA)
EFAMA is the voice of the European investment management industry, which manages over EUR 30 trillion of assets on behalf of its clients in Europe and around the world. We advocate for a regulatory environment that supports our industry’s crucial role in steering capital towards investments for a sustainable future and providing long-term value for investors. Besides fostering a Capital Markets Union, consumer empowerment and sustainable finance in Europe, we also support open and well-functioning global capital markets and engage with international standard setters and relevant third-country authorities. EFAMA is a primary source of industry statistical data and issues regular publications, including Market Insights and the authoritative EFAMA Fact Book. More information is available at www.efama.org.