The Belgian fund sector saw an increase of 6.7% (€10.8bn) during the fourth quarter of 2015 driven by net sales and capital gains in the underlying assets, according to the Belgian Asset Managers Association (Beama). Assets under management (AUM) for publicly distributed funds in Belgium stood at €172.65bn at the end of December 31, 2015, Beama reported.
The years 2014 and 2015 were characterised by net sales in the UCI (Undertakings for Collective Investment) sector and Beama expect this trend to continue in 2016, said Hugo Lasat (pictured), chairman of Beama. "We now see a trend where slowly but surely there is a shift from short-term savings to long-term savings," he said. "Of course, the UCI sector is subject to evolutions in the financial markets and these developments can strengthen or weaken the effect of net sales."
However, AUM for capital-protected structured funds in Belgium decreased by €0.16bn, or 1.5% during the fourth quarter of 2015. The decrease can be fully contributed to net repayments, according to the association. Capital protected funds represented a capital of €10.36bn on December 31, 2015, with €8.66bn of outstanding assets linked to equities and €1.70bn linked to interest rates, loans and currencies, Beama said.
Twelve structured funds, with combined sales of €322m, were added to SRP's Belgian database during the fourth quarter of 2015. The best-selling fund during Q4 was KBC's Perspective Universal Selection 90 Short Term 1. The 90% capital protected fund which has a term of 2.5-years is linked to a basket of 30 stocks and sold €64m during its subscription period.
Whereas only a few years ago capital protected structured funds where available in Belgium via various distributors - AXA, Centea, Dexia AM, Fortis, ING, KBC, Kobelco and La Poste each sold structured funds on a regular basis to their client base - these days only KBC is still active in the structured fund segment. "Without going into details about the individual market players, it can be said that the offer of new capital protected funds has been small in recent years," said Lasat. The assets released by maturing capital protected funds are not compensated by new subscriptions in these type of funds, according to Lasat. "The market conditions, with the very low interest rates, are such that it has become much harder nowadays to offer attractive capital protected funds."
The Belgian fund market is defined as 'the in Belgium publicly distributed net asset value of funds under Belgian and foreign law', according to Beama although non-retail investors are increasingly muscling in. "Ten years ago, almost all share classes of public funds sold in Belgium were available to retail clients [...] however, lately more and more non-retail asset classes have been established and are on offer," said Lasat. "We are very pleased with the increasing diversity. The collective product, or 'the fund', is also increasingly used by institutional clients," he said. In the past, Belgium was seen as a bit of a 'maverick' in Europe due to its high proportion of retail clients in the UCI market, but now we are seeing a change towards the European trend, according to Lasat. "Due to increasing regulation, the notion of institutional and professional investors also became much clearer defined."
Monetary funds - boosted by a floor protection technique used by a number of asset managers - and mixed funds provided the strongest growth in 2015. The increase in mixed funds is linked to the growing use of funds of funds, said Lasat. "The asset managers have seen an increasing demand in funds of funds from investors," he said. "Funds of funds pursue an active allocation policy and have a huge possibility for diversification in their investments - as institutional parties they have easy access to highly specialised markets. This is of course in favour of the investor," according to Lasat. "Furthermore, the growing efficiency of the sector can be pointed out given the increasing usage of so called 'building blocks' in order to pursue a portfolio, thus avoiding to needlessly replicate existing strategies," he said. "Simply stated, asset managers use unique existing building blocks."
Click the link to view the 4Q 2015 figures for the Belgian fundsector (French or Dutch)
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