Trends in European Investment Funds - EFAMA

1 Trends in European Investment Funds 2003-2013 KEY FACTS. AND FIGURES. uropean Investment fund assets doubled E E uropean Investment Funds attracted between end 2003 and end 2013. EUR 2,420 billion over the decade. Investment fund assets stood at end 2013 23% Over the past decade UCITS attracted net sales of higher than at end 2007 and have more than EUR 1,475 billion representing 48% of net asset doubled over the past decade thanks to average growth with market appreciation responsible annual growth of Equity Funds held 37% for the remaining 52% of growth.

2 Non-UCITS. of all UCITS assets at end 2013, followed by bond accounted for the remaining EUR 946 billion of net Funds (28%), balanced Funds (16%) and money sales over the decade. market Funds (13%). UCITS accounted for 70% of Investment fund assets, with the remaining 30%. composed of non-UCITS. Net Assets of European Investment Funds Net Sales of UCITS and Non-UCITS. (EUR billions) (EUR billions). 9,801. 505 522. 8,965. 416. 7,999. 326. 6,174. 6,860. 309. 6,298. 228. 283. 6,133. 4,835 182. 4,528. 3,785. 5. 2,668 2,941. 1,866 1,646. 1,050. (356). 2003 2007 2008 2012 2013.

3 Non-UCITS UCITS 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013. The facts and figures presented in this document have been taken from the EFAMA Fact Book 2014. ustained demand for cross-border Funds S uro area households held 42% of their E. underscores the success of UCITS. financial wealth in bank deposits at end 2013. The share of cross-border fund assets in Europe in Over the last decade, euro area households have 2013 stood at 40% of total European Investment been parking on average 40% of their financial fund assets, compared to 27% at end 2003.

4 Wealth in bank accounts, compared to only 15%. This is a strong testament to the strength of the in the United States. There are several reasons for UCITS brand which has built up over the decade this difference, including the central role played and transformed the European Investment fund by banks in the European economy and greater industry into a global industry. incentives for US households to invest in capital markets to save for education and retirement. Share of Cross-Border Funds in Direct Financial Holdings of Euro Area Households Total Investment Funds (share in total, in percent).

5 45%. 43%. Insurance &. 41% 40% 40% 40% pension fund 39% reserves 39%. Investment 37% 36% 36% 36% Funds Quoted 35% 34% shares 33% 32% Debt securities 31%. 29%. 29% Currency and deposits 27%. 27%. 25%. 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2003 2007 2008 2012 2013. Insurers and pension Funds have been the top uro area households' total Investment fund E. buyers over the decade. ownership reached 20% at end 2013. In 2013, euro area investors purchased a net Taking into account the Investment Funds held amount of EUR 254 billion of Investment Funds , through insurance and pension plans, the share which corresponds to the second largest level over of Investment Funds held by euro area households the last ten years.

6 Insurers and pension Funds have stood at at end 2013, compared to at been the most significant investors, with a total net end 2003. These levels contrast with the low levels accumulation of EUR 937 billion in 2004-2013. of Investment Funds directly held by households ( at end 2013). Net Acquisition of Investment Funds in the Euro Area Direct & Indirect Financial Holdings of Euro Area Households (EUR billions) (share in total, in percent). 242 305 Other 254 245 Investment Funds 15 173 Quoted 57 133 shares -33. -206 Debt securities Currency and deposits 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013.

7 2003 2007 2008 2012 2013. Other financial intermediaries Non-financial corporations General Households Insurers & Pension Funds government orldwide Investment fund net assets W I nvestment fund assets closely follow increased by 7% in 2013 to EUR trillion. developments in the economy. Worldwide Investment fund net assets have stood The overall growth of UCITS and non-UCITS assets is 111% higher at end 2013 than at end 2003. This significantly correlated with the evolution of future represents an average annual growth rate of economic growth and stock market prices.

8 This At end 2013, net assets of worldwide equity Funds finding is consistent with the fact that the net sales amounted to EUR 9,622 billion or 41% of total of Funds are strongly influenced by the economic Investment fund assets. Bond Funds held 21% or outlook. It also reflects the level of exposure of EUR 5,137 billion in net assets. Money market Funds Investment Funds to equities. accounted for 14% of total assets or EUR 3,451 billion. Balanced Funds represented 12% of total assets or EUR. 2,687 billion. Worldwide Investment fund Assets Trends in UCITS and Non-UCITS Assets (EUR billions) 50% 5%.

9 23,769. 22,174 40% 4%. 30% 3%. 18,085 2%. 20%. 14,306 10% 1%. 0% 0%. 11,251. -10% -1%. -20% -2%. -30% -3%. -40% -4%. -50% -5%. 2003 2007 2008 2012 2013 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13. UCITS and Non-UCITS assets growth Real GDP Growth in Year T+1 (RHS). STOXX Europe 600 Index Growth (LHS). urope ranks as the second largest domicile for E et assets of the European Investment fund N. Investment Funds worldwide. industry are expected to continue rising. The United States is the largest domicile for Given the close relationship between Investment Investment Funds , holding a 45% market share at Funds assets, real GDP and stock market prices, it end 2013.

10 Emerging markets accounted for 7% of is possible to forecast the evolution of fund assets the worldwide Investment fund industry and other over the period 2014-2020. According to our countries, including Japan, Canada and Australia, calculations, these assets would lie between EUR. represented 12% of the worldwide market. trillion and EUR trillion by 2020. These forecasts are based on three alternative scenarios for stock prices and real GDP growth in 2015-2020. Worldwide Investment fund Industry at end 2013 Projected Net Assets of UCITS and non-UCITS for 2020.