Figures UCITs Sector 4th Quarter 2020

The net assets of funds primarily investing in non-fixed-income securities, such as mixed funds and equity funds, increased by 9.7% during this period. Equity funds saw the most significant growth in their net assets in the fourth quarter. Within the mixed fund category, pension savings funds increased by 1.5 billion EUR during the period from October to December 2020. In contrast, the net assets of funds mainly investing in fixed-income securities decreased by 2.2% in the fourth quarter of 2020.

Full Year

At the end of 2019, the net assets of publicly distributed funds in Belgium were 219.6 billion EUR. The Belgian fund sector was significantly affected by the consequences of the Covid-19 pandemic during the first quarter of 2020 but showed continuous recovery in net assets during the subsequent quarters.

In the last nine months of 2020, publicly distributed funds in Belgium managed to completely recover the capital losses incurred during the first quarter of 2020, amounting to 28.5 billion EUR, and even ended the year positively with capital gains of 0.8 billion EUR on an annual basis.

Thanks to substantial net subscriptions, the net assets of publicly distributed funds in Belgium were 5.5% higher by the end of 2020 compared to the previous year, representing an increase of 12.1 billion EUR.

2021 Outlook

Preliminary indications for the first quarter of 2021 suggest a continued recovery of the net assets in the Belgian fund sector.

BEAMA's research indicates that during the fourth quarter of 2020, the net assets of publicly distributed funds in Belgium increased by 15.2 billion EUR, or 7.0%. This increase was primarily driven by positive market trends during the period, resulting from the continued recovery of financial markets, and net subscriptions accounted for 40% of the growth.

Throughout 2020, the net assets of publicly distributed funds in Belgium increased by 5.5%, or 12.1 billion EUR.

The positive market trends during the second, third, and fourth quarters of 2020 led to a full recovery of the underlying assets of the funds after their significant decline during the period from January to March 2020 due to the impact of the Covid-19 pandemic on the global economy and financial markets.

In terms of the annual performance for 2020, it's noteworthy that the increase of 12.1 billion EUR was primarily attributed to net subscriptions, amounting to 11.4 billion EUR. High net subscriptions throughout 2020 demonstrate that, similar to the previous six years, investors continue to seek funds as a destination for their savings.

In 2020, bond funds were the strongest relative performers, with a growth rate of 9.8%. Equity funds, on the other hand, were the strongest absolute performers, increasing by 5.3 billion EUR, followed by mixed funds.

Monetary funds also experienced growth in 2020. Capital-protected funds, however, saw a decline in their assets during 2020 and represented the smallest asset class by the end of 2020.

Evolution of the Belgian Fund Market Over the Last Decade

Preliminary indications available to BEAMA for the first quarter of 2021 point to a continued recovery of the net assets in the Belgian fund sector.

Funds Primarily Investing in Non-Fixed-Income Securities

Within the group of funds primarily investing in non-fixed-income securities (such as equity funds), except for capital-protected funds, rising trends were observed during the fourth quarter of 2020. These increases were attributed to capital gains on the underlying assets (55%) and net subscriptions (45%).

Assets in Belgium for equity funds increased by 9.8 billion EUR, representing a 16.1% growth rate during the period from October to December 2020. This increase was primarily due to net subscriptions (60%) and capital gains on underlying assets (40%). By the end of December 2020, the assets of equity funds amounted to 71.1 billion EUR, surpassing their level at the end of 2019 (pre-Covid-19) by 5.3 billion EUR.

The category of mixed funds (including pension savings funds) recorded an increase of 7.3 billion EUR, or 7.2%, during the fourth quarter of 2020. Three-quarters of this increase can be attributed to capital gains on the underlying assets. This brought the total assets under management of mixed funds to 109.6 billion EUR by the end of December 2020, which is 4.0 billion EUR higher than their level at the end of 2019 (pre-Covid-19).

Mixed funds have experienced increasing success in recent years, and since 2015, they have become the largest asset class. Due to their active asset allocation, mixed funds are highly suitable for implementing a risk diversification policy in the context of MiFID II, making them an excellent choice for aligning the product with clients' risk profiles.

Detailed evolution of assets under management over the last decade

Within the category of mixed funds, pension savings funds recorded an increase of 1.5 billion EUR, or 7.3%, during the fourth quarter of 2020. Pension savings funds represented net assets of 22.3 billion EUR by the end of December 2020. This means that pension savings funds reached a new record level of assets under management, surpassing their previous "all-time high" at the end of 2019 by 0.9 billion EUR. In short, pension savings funds achieved a new record level of assets under management by the end of December 2020.

During the fourth quarter of 2020, pension savings funds had net subscriptions of 178 million EUR. On an annual basis, net subscriptions amounted to 414 million EUR.

Capital-protected funds experienced a decline of 0.3 billion EUR during the fourth quarter of 2020 and represented assets of 3.2 billion EUR by the end of December 2020. This movement is mainly due to net redemptions.

Throughout the year 2020, net assets of funds primarily investing in non-fixed-income securities increased by 4.5%, equivalent to 7.9 billion EUR. Notably, the further reduction of capital-protected funds characterized this trend. They represented the smallest asset class by the end of 2020.

The Belgian fund market continued its recovery during 2020, fully recovering all losses incurred at the beginning of 2020 due to the Covid-19 pandemic. Investors also maintained their confidence in the Belgian fund market.

Funds Primarily Investing in Fixed-Income Securities

Within the group of funds primarily investing in fixed-income securities, assets of bond funds distributed in Belgium decreased by 0.2 billion EUR, or 0.6%, during the fourth quarter of 2020, resulting in total assets of 42.7 billion EUR by the end of December 2020.

This decline is entirely attributed to losses in the underlying assets' value, as there were net subscriptions in bond funds during this period.

The net assets of monetary or money market funds decreased by 0.8 billion EUR, or 15.2%, during the period from October to December 2020.

This decline is primarily due to a technical intervention in the portfolios of mixed umbrella funds. Given the positive market movements during the second, third, and fourth quarters of 2020, asset managers of umbrella funds partially replaced their underlying stable money market funds with bond funds and more volatile equity funds to take advantage of the recovery in the financial markets. In other words, the bottom protection technique was further omitted during the last quarter of 2020 by mixed umbrella funds due to the financial markets' recovery.

Throughout the year 2020, net assets of funds primarily investing in fixed-income securities increased by 9.7%, equivalent to 4.2 billion EUR. Notably, the increase in bond funds characterized this trend. After eight years of almost no growth, bond funds grew by 14.9% and 9.8% in 2019 and 2020, respectively.

Publicly distributed funds under Belgian law

By the end of December 2020, publicly distributed funds under Belgian law had a total managed net asset value of 171.3 billion EUR. At that time, pension savings funds represented 22.3 billion EUR of this total, accounting for more than 1/8th of publicly distributed funds under Belgian law.

The calculation of the average annual return for pension savings funds as of December 31, 2020, yielded the following results:

BEAMA has developed a dashboard for pension savings funds, which is attached to this press release. This dashboard provides a concise visual representation of key figures related to third-pillar pension savings funds and their evolution on a quarterly basis.

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 tailored to institutional investors have been developed under the form of "Institutional ICBs 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).

By the end of December 2020, the 113 institutional compartments under Belgian law represented 18.0 billion EUR in net assets. These funds are of interest to many institutional investors, as they provide depth to the institutional markets in terms of financial assets and pension formation.