Robust Net Asset Growth, ETF Dominance, and Household Investment Resilience are key highlights in European Fund and Asset Management Association's (EFAMA) fund trends report released today (19 March). 

The European Quarterly Statistical Release covers the fourth quarter of 2023, together with an overview of the full year 2023.

Bernard Delbecque, senior director for economics and research at EFAMA, said: “In 2023, significant trends emerged, including total net assets of UCITS and AIFs surpassing the EUR 20 trillion threshold once again. There was a strong preference for equity ETFs over actively managed equity UCITS and a solid rebound in bond UCITS net sales. European households continued to increase their investments in funds despite economic growth deceleration, volatile financial markets, and heightened geopolitical tensions.”

Thomas Tilley, Senior Economist at EFAMA, said: “Two types of UCITS did particularly well this quarter: ETFs and MMFs. ETFs broke a quarterly net sales record as investors increasingly use these funds to invest in both stock and bond markets. The inverted yield curve during Q4 2023 is the reason behind the soaring net inflows into MMFs.”

2023 full year highlights include:

o Net assets of UCITS and AIFs increased by 8.3%, ending the year at EUR 20.7 trillion. Growth was primarily driven by increases in both stock and bond markets throughout 2023.
o Net sales of UCITS and AIFs reached EUR 181 billion and EUR 135 billion, respectively.
o Net sales of equity UCITS amounted to EUR 5 billion in 2023, with ETFs attracting EUR 101 billion in net new money and non-ETFs registering net outflows of EUR 96 billion.
o Net sales of bond funds totalled EUR 141 billion.
o Multi-asset UCITS recorded net outflows totalling EUR 121 billion, as investors shifted into ETFs and fixed-income funds.
o Multi-asset AIFs attracted EUR 66 billion in net new money, with German institutional funds registering solid net sales.
o Money market funds attracted the highest net inflows of 2023. UCITS MMFs attracted EUR 172 billion of net inflows.

The main developments in Q4 2023 are as follows:

o Net assets of UCITS and AIFs rebounded in the fourth quarter and rose by 4.8%.
o UCITS and AIFs attracted EUR 156 billion in net inflows in Q4 2023. Net sales of UCITS amounted to EUR 92 billion, while AIFs registered net inflows of EUR 64 billion.
o Long-term funds registered net inflows of EUR 35 billion. Equity and multi-asset funds continued to record net outflows, whereas bond funds attracted net new inflows.
o Money market funds attracted very strong net sales of EUR 121 billion during the quarter.
o Long-term SFDR Article 8 and Article 9 funds registered net outflows. These were the first quarterly net outflows from Article 9 funds since the inception of the SFDR.
o Net fund acquisitions by European households declined in Q3 2023 compared to previous quarters but remained positive (EUR 7 billion).