Year in figures

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Luxembourg is the number one hub for global cross-border fund distribution. It is the largest fund centre in Europe and second largest in the world.

Assets under management in the European investment fund industry

The 10 largest investment fund domiciles in Europe as at 31 December 2016

The European fund industry has experienced year-on-year growth in net assets since 2012, and 2016 was no exception despite a degree of market uncertainty. There were EUR 14,141.5 billion in assets under management at the end of 2016 thanks to 6.1% growth during the year. UCITS accounted for 61.2% of this total, with the remainder being alternative investment funds (AIFs). Luxembourg remains the leading fund domicile in Europe, with a market share close to the combined total for Ireland and Germany, the second and third placed countries.

The European fund industry has experienced year-on-year growth in net assets since 2012, and 2016 was no exception despite a degree of market uncertainty. There were EUR 14,141.5 billion assets under management at the end of 2016 thanks to 6.1% growth during the year. UCITS accounted for 61.2% of this total, with the remainder being alternative investment funds (AIFs). Luxembourg remains the leading fund domicile in Europe, with a market share close to the combined total for Ireland and Germany, the second and third placed countries.

Net assets under management in Luxembourg funds

2016 was a remarkable year for the Luxembourg fund industry. From August on, net assets under management posted all-time records every month, beating the previous record of EUR 3,601.525 billion set in May 2015 and passing the EUR 3,700 billion threshold at year-end.

Growth factors in Luxembourg investment funds

2016 got off to a very tense start, with a sharp correction in the financial markets against a backdrop of concerns about China’s growth and falling oil prices. June was buffeted by uncertainties surrounding the UK referendum on leaving the European Union, which translated for a short while into a fall in net assets. After that, net assets under management resume uninterrupted growth, reaching an all-time high of EUR 3,701.076 billion at year-end 2016. With an annual growth rate of 5.56%, the year 2016 was a good one for the Luxembourg fund industry, with the financial markets and net inflows contributing almost equally to the increase (EUR 96.126 billion and EUR 98.749 billion respectively).

Number of Luxembourg investment funds (legal entities)

Number of funds registered on or withdrawn from the CSSF list since 2000 

Number of Luxembourg fund units

There were 3,861 funds domiciled in Luxembourg at the end of 2016. This was a slight decrease from 2015, with 296 new funds launched and 313 withdrawn. There were 14,211 fund units at the end of the year, a net annual increase of 0.73%.

Legal status of Luxembourg domiciled investment funds

65% of all new funds created were specialised investment funds (SIFs), confirming the continued success of this product since it was introduced in 2007. At the end of March 2017 SIFs accounted for 39% of the Luxembourg market in terms of number of funds. The “Société d’Investissement en Capital Variable” (SICAV) has been the most popular structure since 2012, and at the end of March 2017 accounted for 53.7% of funds, compared with 38.4% for the once-dominant “Fonds Commun de Placement” (FCP).

Market shares of initiators by origin at 31 December 2016

The top ten initiators of Luxembourg UCIs by geographical origin remained almost unchanged in 2016.

The US remained number one with 21%, but its market share fell for the fifth year running. The UK was next with 17.2% (following five years of growth) with Germany (14.3%) ranked third. They were just ahead of Switzerland (13.5%) which has seen its share decline in recent years. All the top ten saw growth in net assets, with players from Germany enjoying particularly strong growth of 11.5% compared with 2.1% for US-based initiators. Dutch initiators saw the highest percentage increase (16.4%), albeit from a lower base. In terms of the number of funds and fund units, German initiators have accounted for the most since 2007.

Investment policy of Luxembourg funds at 31 December 2016

 

Bond funds represented 30.67% of total net assets at the end of 2016.

They took back the first place in the ranking of asset classes in the UCI sector, the position they had held since 2001 before being briefly dethroned in 2015 by equity funds. 

Equity funds lost 0.9 percentage points of market share over the year, to move below the threshold of 30.0%. Balanced funds came third (21.56% of total net assets) andEquity funds lost 0.9 percentage points of market share over the year, to move down the threshold of 30.0%. Balanced funds came third (21,58% of total net assets) and with 28.61% of the total number of fund units (4,066 out of 14,211) they have been the category most sought after by investors since 2010.

Specialised investment funds (SIFs) represented more than 11% of the assets in the Luxembourg fund industry at the end of 2016. All SIF asset classes (with the exception of cash and funds of funds) saw growth in their net assets in 2016.

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