German mixed funds continue growth run
At the end of November 2020, mixed funds’ assets under management stood at approximately €321bn, despite the temporarily high price losses on the stock markets (around €10bn) at the end of 2019, according to latest data from German fund association, BVI.
The assets under management of these funds stood at €121bn in 2010, overtaking the bond funds with €217bn at the end of 2015. In the past ten years, investors have placed €160bn in mixed funds, corresponding to 60% of the total net funds inflow of mutual funds during this period. In comparison, bond funds attracted a mere €70bn, which was before the European Central Bank’s negative interest rates in 2014. Mixed funds account for 28% of assets under management of mutual funds and 32% of securities funds. In Europe, as a whole, bond and money market funds are more important, with a share of 28% and 13% respectively.
Half of the investments into mixed funds are channelled into products that invest equally in equities and bonds. These “balanced” funds accounted for 46% of the total market recently, corresponding to a slight decline since October 2010 (51%). Equity-focused mixed funds account for 29% (19% in 2010), with bond-focused funds accounting for 29% (19% in 2010). Over the last ten years, there has been a shift towards funds with higher equity quotas. In 2019, mixed funds accounted for 83% of net funds inflow, with equity-oriented products accounting for two-thirds of new business for the first ten months of 2020. In terms of regional focus, global funds account for 79% (74% in 2010), with funds investing primarily in Germany or in Europe are the exception.
The mixed fund segment is concentrated, with five largest providers (by volume) accounting for three quarters of the money invested in mixed funds. Allianz Global Investors is at the top with a market share of over 20 percent, closely followed by Union Investment, Deka Investment, Flossbach von Storch (FvS) and DWS. More than 60 fund houses in Germany offering about 2,600 mixed funds or unit certificate classes.
In 2020, these funds were the main investment focus, with equity-focused funds increasing their performance by an average of 1.6%, balanced investment products by 1.9% and bond-focused funds by 0.9%.