3850 billion: The hunt for records on the stock exchanges also spurs the fund industry.
The rapid recovery on the stock exchanges after the crash at the beginning of the pandemic gave the German fund industry another record year. “The 2020 stock market year, which was marked by the corona crisis, developed significantly better than expected a year ago,” said the President of the German Investment and Asset Management Association (BVI), Alexander Schindler, on Tuesday in Frankfurt.
“The recovery in the securities markets contributed to the fact that the fund companies reached a new record level for assets under management at the end of the year with EUR 3,850 billion,” said Schindler. A year earlier it was just under 3,400 billion.
“In view of the Corona crisis, 2020 was a very good year for sales,” said Union Investment Manager. The bottom line is that, according to BVI information, investors put 127 billion euros in fresh money in investment funds. That is the third highest value since the statistics were recorded. Only in 2015 (193 billion euros) and 2017 (164 billion euros) did the providers in Europe’s largest fund market, Germany, record more new business.
Almost two-thirds (63 percent) of the new business with around 80 billion euros was contributed by professional investors such as insurers and pension funds with investments in open special funds. With assets of 1.998 billion euros, such special funds are the largest fund group in Germany.
Retail funds, which are aimed at broader groups of investors, collected significantly more new money at 43.2 billion euros than a year earlier (17.3 billion euros). After investors withdrew funds in the course of the price drop on the stock exchanges in the first quarter of 2020, new business in retail funds recovered quickly. Equity funds led the sales list in this category: Here investors invested a net 20.9 billion euros, more than four times as much as a year earlier (4.5 billion euros). The assets in open mutual funds add up to 1,180 billion euros.
“Apparently, many Germans have used the Corona crisis to get into securities investments for the first time, after a long period of time, or more intensely,” said Schindler. “Since savings accounts are no longer generating any income, we are seeing increasing interest among savers in investing in funds. The low interest rates are doing what years of financial education or promoting the equity culture have failed.”