The Belgian fund sector recorded an increase of +6.5% during the fourth quarter of 2023 and this was mainly due to price gains registered in underlying assets and complemented by net subscriptions. At the end of December 2023, the net assets of funds publicly distributed in Belgium amounted to EUR 271.9 billion.

Both funds investing in fixed-income securities and those investing in variable-yield securities recorded price gains in their underlying assets during the fourth quarter.

A more varied picture can be observed in terms of net subscriptions. For instance, bond funds and equity funds experienced net redemptions during the fourth quarter, but monetary funds and mixed funds experienced more significant net subscriptions during this period.

Full year

At the end of 2022, the net assets of funds publicly distributed in Belgium amounted to EUR 241.9 billion. The Belgian fund sector saw an increase in net assets during the first half of 2023, mainly due to price gains recorded by underlying assets. During the third quarter, net assets declined due to price losses in the underlying assets. However, in the last quarter of 2023, this decline was fully reversed, mainly driven by price gains recorded by the underlying assets.

For the full year 2023, the net assets of the funds publicly distributed in Belgium stood at 12.4% in December 2023, or EUR 30.0 billion, which is higher than at the end of 2022, mainly due to price gains recorded by the underlying assets.

Forecast first quarter 2024

Preliminary indications for the first quarter of 2024 indicate continued growth in the net assets of the Belgian fund industry.

The Belgian fund market is defined as "the net assets of funds under Belgian and foreign law publicly distributed in Belgium". In this regard, BEAMA reports on all share classes of public funds that may be commercialised in Belgium.

BEAMA research shows that the net assets of funds publicly distributed in Belgium increased by EUR 16.6 billion, or +6.5%, during the fourth quarter of 2023. As a result, funds publicly distributed in Belgium represented €271.9 billion at the end of December 2023.

The increase in the Belgian funds market during the period October - December 2023 is mainly explained by price gains recorded in underlying assets during this period, complemented by net subscriptions.

The, for now, sustained demand for funds indicates that Belgian investors currently still retain confidence in funds and are aware of the opportunity costs associated with the various forms of saving and investing.  

The evolution in 2023 of the Belgian funds market, which consists mainly of internationally diversified investment portfolios, cannot be separated from the global economic context and increased geopolitical tensions.

Inflation, and the central banks' reaction to it, continued to trouble investors. Finally, by 2023, inflation in the euro area had already fallen sharply to an average of 5.4%.

In the first half of the year, interest rates seemed to stabilise and equity markets did quite well. However, hopes of an interest rate cut were tempered at the beginning of the second half to avoid a resurgence in inflation. This had a negative impact on equity and bond prices in September and October, which also affected fund returns.

This came to change towards the end of 2023. Central banks' indications of possible interest rate cuts in 2024 sent a positive signal to stock markets, resulting in a nice equity rally until the end of the year, which also continued in the first months of 2024. Interest rates allowed bonds to offer attractive yields.

The strong growth of the Belgian funds market in 2023 is therefore due to the rebounding equity and bond markets. This allowed all asset classes to post positive results for the year as a whole.

Despite these volatile/difficult market conditions, the Belgian fund sector grew by €30.0 billion, or +12.4% during 2023. Over 80% of this increase is accounted for by price gains recorded by the underlying assets, and the remaining part by net subscriptions during the period January - December 2023. This movement is also confirmed by the NBB's statistical data.

The preliminary indications, which BEAMA has at its disposal for the first quarter of 2024, indicate continued growth in the net assets of the Belgian fund sector.

Within the group of funds investing predominantly in variable-yield securities (e.g. equity funds), only rising trends were recorded during the fourth quarter of 2023. These increases are mainly explained by price gains registered by the underlying assets.

Equity funds' assets in Belgium increased by EUR 6.4 billion, or +7.8%, in the period October - December 2023. This increase is entirely due to price gains recorded in the underlying assets. At the end of December 2023, the equity funds' assets amounted to EUR 87.9 billion.

The mixed funds category (including pension savings funds) recorded an increase of EUR 7.8 billion, or +6.6%, during Q4 2023. This increase is almost 2/3rd attributable to price gains recorded by underlying assets and 1/3rd by net subscriptions amounting to EUR 2.9 billion. This brings the commercialised assets of the mixed funds at the end of December 2023 to EUR 126.6 billion.

Mixed funds have enjoyed increasing success in recent years and have been the largest asset class since 2015. Due to their active asset allocation, mixed funds are well suited to the pursuit of a risk diversification policy under MiFID II: they lend themselves perfectly to matching the product to the risk profile of clients.

Within the mixed funds category, pension savings funds experienced an increase during the fourth quarter of 2023 amounting to €1.8 billion, or +7.8%. Pension savings funds represented net assets of EUR 24.7 billion at the end of December 2023. During the fourth quarter of 2023, the pension savings funds drew net subscriptions amounting to EUR 113 million.

Funds with capital protection recorded an increase during the fourth quarter of 2023 and represented assets of EUR 2.5 billion at the end of December 2023.

For the full year 2023, the net assets of funds investing predominantly in variable-yield assets increased by +12.8%, or EUR 24.7 billion.

Within the group of funds investing predominantly in fixed-income securities, the assets of bond funds marketed in Belgium increased by EUR 1.2 billion, or +2.6%, during the fourth quarter of 2023, bringing them to EUR 48.8 billion at the end of December 2023. This increase is entirely due to price gains recorded in the underlying assets.

The net assets of the monetary or money market funds recorded an increase of EUR 1.0 billion, or +22.5% during the period October - December 2023 taking them to EUR 5.5 billion at the end of December 2023.

For the full year 2023, net assets of funds investing predominantly in fixed-income assets increased by +10.7%, or EUR5.3 billion.

More than 3/4th of the assets distributed in Belgium are, according to asset managers, classified as an SFDR Article 8 or an SFDR Article 9 fund. Here, investors interested in a certain level of sustainability can choose from 1,187 different funds.

Publicly distributed funds under Belgian law accounted for total net assets under management of EUR 202.3 billion at the end of December 2023. At the same time, the pension savings funds herein represented roughly 1/8th of the public funds under Belgian law.

Calculating the average return of pension savings funds on an annual basis as at 31 December 2023 provides the following result:

• At 1 year: +9.8%

• At 3 years: +1.0%

• At 10 years: +3.8%

• At 25 years: +3.3%

BEAMA has developed a dashboard for pension savings funds which is attached to this press release. Thanks to this dashboard, key figures surrounding third pillar pension savings funds and their evolution are visually presented on a quarterly basis in a concise manner.

Since the implementing decrees were published in the Belgian Official Gazette on 18 December 2007, investment vehicles can be developed for institutional investors in the form of "Institutional UCI with a variable number of units". These institutional funds are non-public funds that must be notified to the FPS Finance.

These institutional funds should not be confused with the public funds with non-retail share classes, which are notified to the FSMA.

At the end of December 2023, the 104 institutional sub-funds under Belgian law accounted for EUR 25.0 billion in net assets. These funds appeal to many institutional investors, partly because they add depth to institutional markets in financial assets and pension formation.

More information can be obtained from the representation for BEAMA, being:

• Mr Marc Van de Gucht, Director-General BEAMA

(02 507 68 72 – marc.van.de.gucht@febelfin.be) 

• At the BEAMA services (info@beama.be) (info@beama.be) 

Or through Febelfin's general press contacts, being: 

• Febelfin's press office

(02 507 68 31 – press@febelfin.be) 

The above and other statistics concerning the UCI industry, are available on the BEAMA website (https://www.beama.be/) under the 'Statistics' section.