“This year’s fact book shows that Ucits are delivering good returns with costs declining, attracting both European and foreign investors,” commented Tanguy van de Werve, director general of the European Fund and Asset Management Association, in a press release upon the publication of Efama’s annual fact book on 18 June 2024. Photo: Efama

“This year’s fact book shows that Ucits are delivering good returns with costs declining, attracting both European and foreign investors,” commented Tanguy van de Werve, director general of the European Fund and Asset Management Association, in a press release upon the publication of Efama’s annual fact book on 18 June 2024. Photo: Efama

Five countries--Luxembourg, Ireland, Germany, France and the UK--hold the largest market shares of investment fund assets, says Efama’s latest fact book. Luxembourg was the largest domicile for Ucits as of the end of 2023. But Ireland had the largest market share in terms of ETF Ucits net assets.

The 2023 edition of the European Fund and Asset Management Association’s , published on 18 June 2024, found that the Ucits market was “marked by robust net inflows” into money market funds and bond funds, as well as net outflows from multi-asset funds. Exchange-traded funds (ETFs) had a “record-breaking year,” attracting €169bn in net sales, while sales of dark green article 9 funds--which have a sustainable investment objective--slowed and article 6 funds--which don’t have any sustainability criteria--attracted €41bn in net inflows.

Large funds are becoming more important in the Ucits market, passive Ucits are gaining market share and the average cost of long-term Ucits has decreased over the last five years, noted Efama in its report. The share of US stocks in the asset allocation of equity Ucits has increased “sharply” since 2013.

“This year’s fact book shows that Ucits are delivering good returns with costs declining, attracting both European and foreign investors,” Tanguy van de Werve, Efama director general, commented in a press release. “While this is good news for the financial wellbeing of those investors, there are still far too many European households not reaping the benefits of investing in capital markets.”

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“This is a pivotal year of change within the EU institutions, with clear recognition from policymakers that we need to encourage more retail investing to address the pension gap and support economic growth,” added van de Werve. “To achieve that, we need decisive actions that simplify investing, cut red tape and move us closer to a savings and investments union.”

Here are a few key figures from the report.

Luxembourg holds 26% of net assets

Net assets at the end of 2023 stood at €20.7trn, said Efama, with Ucits accounting for €13.1trn and alternative investment funds accounting for €7.5trn. That’s an overall increase of 9% when compared to 2022. Ucits net assets increased by 10% in 2023, while AIF net assets grew by 7%.

The top five countries--Luxembourg, Ireland, Germany, France and UK--accounted for 78% of total net fund assets in 2023. The grand duchy alone, with €5.285trn, had just over a quarter (26%) of net fund assets. In 2013, it had €2.615trn of net assets, giving it 25% of market share.

Ucits in general have had a good year, with a “positive” average annual performance for all major Ucits types. “Equity Ucits delivered on average 14.2%, multi-asset Ucits yielded 8.7%, bond Ucits 5.7% and money market funds 3.3%,” said Efama. Luxembourg was the largest domicile for Ucits as of the end of 2023, with 32.6% of market share. Ireland came in second place, with 24.5%.

The net assets of nationally domiciled Ucits in Luxembourg at the end of 2023 came to €4,291.3bn, a growth rate of 5.2%. But the net assets of nationally domiciled Ucits in Ireland (€3,217.4bn), while lower than in the grand duchy, saw a growth rate of 14.3%.

MMF, ETF Ucits: Ireland ahead of Luxembourg

When it comes to long-term Ucits, Luxembourg takes around one-third (33%) of net assets. The grand duchy also has 29% of equity Ucits net assets and a little over one-third (37%) of the net assets of bond Ucits.

But Ireland pulls ahead when it comes to money market fund Ucits net assets and ETF Ucits. Ireland’s dominance of market share in terms of ETF Ucits net assets is particularly evident: it has 71% of ETF Ucits net assets compared to Luxembourg’s 21%.

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Germany has largest share of AIF net assets

Germany had the largest share of net assets (29%) of alternative investment funds at the end of 2023, followed by France with 18% and Luxembourg with 13%. Here are some details on the countries with the five largest shares, which together account for roughly 81% of net assets.

Germany comes on top for nearly every asset class.

France, however, has the largest share of “other” AIF net assets. These include a variety of fund categories, such as securitisation, private equity, debt/loan, hedge funds or commodities funds. “They all invest in alternative, less-liquid assets,” explained Efama in its report.

Luxembourg still the leading cross-border fund domicile

Cross-border funds can be sold outside their country of domiciliation, noted the Efama report, thanks to their EU passport. In 2023, the net assets of cross-border funds in Luxembourg came to €5.543trn. Ireland accounted for €4.759trn. Ninety percent of Ireland’s total net assets are made up of cross-border funds; 87% of Luxembourg’s total net assets are cross-border funds.

France, Germany and the Netherlands came in a distant third, fourth and fifth place.

Ireland saw the “vast majority” (€178bn) of cross-border fund sales in 2023.

Find the 2023 edition of Efama’s fact book .

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