Crédit Agricole and Fidelity take European fund plaudits

I am writing this in London, just an hour ahead of the Academy Awards ceremony in Hollywood. TV presenters have beamed in to tell the world that the red carpet is ready, the paparazzi are out in force, and all are breathlessly awaiting the arrival of the stars.

How different it is in the fund industry world.

No glitz, no glamour, just (or so we tell everyone) unremitting daily market monitoring, decision taking and portfolio moving on behalf of investors. But, with most of the full-year 2003 data now gathered-in could we not, with a little imagination, envisage a rather different event to the one I am watching on television?

“Ladies and gentlemen… Welcome to the European Fund Industry’s 2003 Results Award Ceremony…”

Looking back it has been a tough year. The European investment experience during 2003 can only be described as dazed and confused. It will remain as a year of contradictions in the memories of asset managers struggling to adjust budgets to an investment community that seemed no longer willing to pay a premium for active investment management skills.

The year started on a nervous war footing, financial markets hitting the floor by the end of the first quarter but then rallying on firmly upward trajectories.

Improved markets allowed asset managers to breathe a collective sigh of relief. Asset expansion was, once again, a feature of their landscape and investors no longer seemed to be hiding in money market funds and cash deposits.

Net new money increases

The net asset base of all Europe’s fund markets grew by €435bn (an increase of +14.5 per cent) to stand at €3420bn, and of this increase 45.3 per cent was due to net new sales. This reflects well against the experience of our industry’s American cousin where, whilst net assets rose by 16 per cent, only 3.6 per cent was due to net new money.

It definitely seems that European investors are still enthusiastic about funds.

So, looking across our 17-fund marketplace, the nominations for the traditional largest fund domicile in asset terms are… Luxembourg, France, Italy, the United Kingdom and Germany. With 6810 domiciled funds amounting to €883.6bn, Luxembourg is top of the list, followed by France (5763 funds/€655bn), Italy (1164 funds/€387.6bn), the UK (1556 funds/€315.1bn) and Germany (1100 funds/€300.3bn).

And the votes cast indicate no change in the asset productions of the various domiciles. Indeed this has been the award scenario for the last three years.

But, this year we have a new award called market category, – created by reallocating round-trip and including the cross-border group universe as a category in its own right. The creation of this category has come about due to increasing requests to understand more about the strength of manufacturing groups based in highly ranked Luxembourg and Dublin but whose actual performance seems lost in the national statistics. This throws a completely different spotlight on the main arenas and also allows us to calculate their box-office success.

Taking into account net assets at the end of last year, France is on top with a total of €712.5bn net assets, followed by Italy with €514.3bn, and cross-border groups with €442.9bn.

If we focus on best growth of assets, the spotlight is on some of the smaller markets, particularly the Nordic markets. Finland comes first in this market category with a growth of 33.7 per cent. Sweden, with a 25.4 per cent increase, and Denmark, with 23.5 per cent, follow.

The producers

Looking at overall activity throughout the year, sales flows have been positive. Regarding awards for estimated net sales by market, the leading role again goes to the cross-border actors with a total of €60.2bn. But this year Italy and Spain have given some sterling supporting runs, with net sales of €24.9bn and €18.8bn respectively.

In the case of Italy a surge of interest in short-term bond funds reversed two years of audience redemption into strong positive showings. For Spain, new tax laws invigorated the leading banks into unprecedented activity particularly in the guaranteed fund genre, where net new sales attracted €13bn.

But enough of the big arenas. Who were the best producers?

The award for largest investment management group in Europe now goes to Crédit Agricole. This is due to its merger with Crédit Lyonnais. Note the stature that can be gained from such a merger: Crédit Agricole ranked sixth last year and Crédit Lyonnais was not even in the top 20.

DWS overtakes UBS

Results from UBS, previously the undisputed champion in this class, have just been pipped by DWS, whose range of absolute return funds have gained a strong following, while San Paulo IMI had good success selling bond products. (See Chart 1.)

And finally, ladies and gentlemen, something new. As we all know, asset size is the combination of two skills, investment performance and sales results. Fund performance awards are many, but we want to introduce some new awards: the ‘Oscars’ for outstanding sales.

And for the first time this year the judges have viewed three initial categories: equity funds, bond funds and money market fund. And the leading – and best supporting – actors for these new awards are as follows.

In the equity category, Fidelity Funds – European Growth gets the first prize. Managed by Fidelity Investments, the fund’s estimated net sales was €2.066bn. (See Chart 2.)

In the fixed income arena and with estimated net sales of €2.821bn, Crédit Agricole’s CA-AM Arbitrage VaR2 is the best-seller fund. (See Chart 3.)

And fund managers Diethniki Mutual Funds make it to the top in the money market category with their Delos Money Market fund that had estimated net sales of €3.060bn. (See Chart 4.)

Note: Data on Belgian and Swedish funds is incomplete and has therefore not been included in calculations. For a free copy (subject to availability) of FERI FMI’s European Mutual Fund Market Data Digest, e-mail: infoplus@feri-fmi.com or visit: www.feri-fmi.com

Source: All data is sourced from FERI – FundFile, a monthly updated sales and asset flow database on over 31,000 European domestic and cross-border mutual funds, compiled by FERI Fund Market Information Ltd.

Rodney Williams, managing director, FERI Fund Market Information. Website: www.feri-fmi.com

E-mail: infoplus@feri-fmi.com