Net assets for capital-protected structured funds in Belgium stood at €5.6 billion at the end of the second quarter of 2018, down by €0.48 billion, or 7.9%, from the previous quarter, according to the latest figures released by the Belgian Asset Managers Association (Beama).
As of June 30, 2018, capital-protected funds made up 2.86% of the total Belgian fund market, with €5.38 billion of outstanding assets linked to equities and €0.22 billion to interest rates, loans and currencies. The decrease can be fully attributed to negative investment returns of the underlying assets, according to the trade association.
Since 2008, when assets stood at €36.2 billion, capital-protected funds have shown a steady decline (with the exception of 2014), a tendency reflected in issuance and sales figures for structured funds recorded in the SRP Belgium database. In 2008, there were 216 structured funds worth €6.4 billion distributed in Belgium, from 10 different distributors, including Axa, Centea, Dexia, Fortis, ING and KBC while last year there were just 33 funds (€714m), with KBC the sole provider.
Eight structured funds, with combined sales of €182m, had strike dates in the second quarter of 2018, according to SRP data. During the same period, 56 medium-term notes (€507m) and 12 unit-linked life insurance products (€334m) also struck. This year to date, 26 structured funds worth an estimated €509m have been issued in Belgium, of which KBC's 2.5-year Perspective Europe 100 Timing USD 2 was the bestseller, achieving sales of €31.7m in the subscription period.
Funds that predominately invest in non-fixed income securities (e.g. equity funds) recorded an upward trend during the second quarter, with the exception of CPPI funds and the aforementioned capital-protected funds, while mixed funds, including pension savings funds, registered an increase of €1.6 billion in Q2 2018 and had total assets of €94.5 billion at the end of June.
Mixed funds have been increasingly successful in recent years, and, according to Beama, have been the largest asset class since 2015. Due to their active asset allocation, mixed funds are suitable for conducting a risk diversification policy in the context of Mifid 2, as ‘the product can be tailored to the risk profile of the clients’, the association said.
The Belgian fund sector as a whole maintained its status quo situation during the first quarter of 2018 while the second quarter was characterised by a slight increase, which made that mid-2018 the net assets of publicly distributed funds in Belgium were 0.6% higher than at the start of the year, according to Marnix Arickx (pictured), chairman, Beama. ‘The increase was mainly due to net subscriptions, in the order of €5 billion,’ said Arickx.
For the second semester Beama is expecting the fund sector to experience the effect of volatile market conditions and interest rate fluctuations, driven by, among other things, the US trade agreements, the difficult budgeting in some Euro countries (which can infect the EU sentiment), the German elections and the uncertainty surrounding Brexit, according to Arickx.
Click the link to view the Beama figures for the second quarter of 2018 (Dutch/French).