Figures UCITs sector 2nd quarter 2021
15 October 2021 - 7 min Reading time
The Belgian fund sector experienced a growth of 5.3% during the second quarter of 2021, with approximately 60% attributed to net subscriptions and 40% to the increase in underlying assets. At the end of June 2021, the net assets of publicly distributed funds in Belgium amounted to 259.6 billion EUR.
The net assets of funds primarily investing in non-fixed-income securities, such as mixed funds and equity funds, increased by 6.2% during this period. Equity funds saw the largest increase in their net assets during the second quarter of 2021. Within the category of mixed funds, pension savings funds experienced an increase of 0.9 billion EUR during the period from April to June 2021.
The net assets of funds primarily investing in fixed-income securities registered a 1.4% increase during the second quarter of 2021.
Forecast for the third quarter of 2021
Preliminary indications for the third quarter of 2021 suggest a stagnation of the net assets of the Belgian fund sector..
Belgian Fund Market
The Belgian fund market is defined as 'the publicly distributed net assets of funds under Belgian and foreign law' and BEAMA reports on all share classes of public funds that may be marketed in Belgium.
In accordance with the list of public collective investment institutions on the FSMA website.
BEAMA's research shows that the net assets of publicly distributed funds in Belgium increased by 13.0 billion EUR, or 5.3%, during the second quarter of 2021. As a result, publicly distributed funds in Belgium represented 259.6 billion EUR at the end of June 2021.
The increase in the Belgian fund market during the period from April to June 2021 can be explained largely by 60% through net subscriptions and 40% by the positive market developments that occurred during this period.
During the first half of 2021, the Belgian fund market increased by 27.9 billion EUR. This increase is primarily attributable to gains in value recorded by the underlying assets. Positive macroeconomic data confirm strong economic recovery (globally). Belgium's high vaccination rate and the effectiveness of vaccinations are contributing to the relaunch of the Belgian economy. Furthermore, more than 40% of this increase can be attributed to net subscriptions. The observation of significant net subscriptions seems to continue in 2021, indicating ongoing investor confidence in the Belgian fund market.
Percentage of retail share classes in the Belgian fund market:
EAMA defines retail share classes as share classes that may be offered to individuals, with a minimum (initial) investment not exceeding 100,000 EUR, and with no additional conditions imposed by the fund manager. Therefore, technical refinements in BEAMA's statistics were made during the first half of 2016.
Preliminary indications available to BEAMA for the third quarter of 2021 suggest a stagnation of the net assets of the Belgian fund sector.
Funds predominantly investing in non-fixed-income securities
Within the group of funds that predominantly invest in non-fixed-income securities (such as equity funds), except for capital-protected funds, only rising trends were recorded during the second quarter of 2021. These increases are attributed to 54% net subscriptions and 46% capital gains on the underlying assets.
The assets in Belgium of equity funds increased by 6.8 billion EUR, or 8.4%, during the period from April to June 2021. This increase is attributed to two-thirds net subscriptions and one-third capital gains on the underlying assets. At the end of June 2021, the assets of equity funds amounted to 87.5 billion EUR. Equity funds are thus 21.7 billion EUR above their level at the end of 2019 (pre-COVID-19).
The category of mixed funds (including pension savings funds) saw an increase of 5.8 billion EUR, or 5.0%, during the second quarter of 2021. This increase is attributed to 60% capital gains on the underlying assets. The commercialized assets of mixed funds amounted to 121.4 billion EUR at the end of June 2021, which is 15.8 billion EUR above their level at the end of 2019 (pre-COVID-19).
Mixed funds have seen 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 for implementing a risk diversification policy under MiFID II, making them suitable for aligning the product with clients' risk profiles.
Within the category of mixed funds, pension savings funds increased by 0.9 billion EUR, or 3.9%, during the second quarter of 2021. Pension savings funds represented net assets of 24.2 billion EUR at the end of June 2021, setting a new record for commercialized assets. During the second quarter of 2021, pension savings funds recorded net subscriptions of 197 million EUR.
Funds with capital protection experienced a decrease of 0.3 billion EUR during the second quarter of 2021 and represented assets of 2.9 billion EUR at the end of June 2021. This movement is due to net repayments.
Funds predominantly investing in fixed-income securities
Within the group of funds that predominantly invest in fixed-income securities, the assets of publicly distributed bond funds in Belgium increased by 1.2 billion EUR, or 2.8%, during the second quarter of 2021, resulting in total assets of 44.9 billion EUR at the end of June 2021. The increase is entirely attributed to net subscriptions.
The net assets of money market funds decreased by 0.6 billion EUR, or 19.6%, during the period from April to June 2021.
This decline is mainly the result of a technical intervention in the portfolios of mixed umbrella funds, consistent with previous quarters. Given the positive market movements in previous quarters, asset managers of umbrella funds have increasingly shifted their underlying stable monetary funds to bond funds and more volatile equity funds during the post-COVID-19 period to benefit from the financial market recovery.
"The Belgian fund market continued its strong growth during the second quarter of 2021 and recorded a record amount of nearly 260 billion EUR in commercialized assets, which is 40 billion EUR more than before COVID-19."
Funds under Belgian Law
Publicly distributed funds under Belgian law
As of the end of June 2021, publicly distributed funds under Belgian law had a total managed net asset value of 194.7 billion EUR. At the same time, pension savings funds represented roughly 1/8th of publicly distributed funds under Belgian law.
The calculation of the average annual return for pension savings funds as of June 30, 2021, provides the following results:
- 1-year: +16.3% (Note: This measurement starts relatively shortly after the COVID-19 low point)
- 3-year: +5.2%
- 10-year: +5.8%
- 25-year: +6.1%
BEAMA has developed a dashboard for pension savings funds, which is attached to this press release. This dashboard visually presents key figures and their evolution on a quarterly basis for third pillar pension savings funds.
Non-publicly distributed institutional funds under Belgian law
Since the implementing royal decrees were published in the Belgian Official Gazette on December 18, 2007, investment vehicles can be developed tailored to institutional investors in the form of "Institutional ICB with a variable number of units." These institutional funds are non-public funds that must be registered with the Federal Public Service for Finance.
These institutional funds should not be confused with publicly distributed funds with non-retail share classes, which are registered with the Financial Services and Markets Authority (FSMA).
As of the end of June 2021, the 116 institutional compartments under Belgian law represented 23.7 billion EUR in net assets. These funds appeal to many institutional investors, in part because they provide depth to institutional markets in terms of financial assets and pension formation.
