The Luxembourg undertaking for collective investment industry witnessed a €207.485bn decline in net asset value during March 2025, the Luxembourg Financial Sector Supervisory Commission (CSSF) on 30 April 2025. As of 31 March 2025, total net assets stood at €5,749.779bn, reflecting a 3.48% decrease from €5,957.264bn on . However, over the past 12 months, total assets had increased by 4.82%.
The monthly decrease stemmed from a divergence between capital inflows and market performance, the CSSF noted. Net subscriptions amounted to €16.319bn, equivalent to a 0.28% increase, but these inflows were outweighed by negative market developments, which led to a depreciation of €223.804bn, or 3.76%.
Fund structures
At the end of March, 3,124 undertakings for collective investment were active in Luxembourg, down from 3,131 in the previous month. Of these, 2,066 operated under an umbrella structure comprising 12,461 sub-funds. Alongside 1,058 traditionally structured funds, the total number of active fund units reached 13,519. Over the month, nine new undertakings for collective investment were added to the official list, while 16 were removed, resulting in a net reduction in the number of active funds.
Market sentiment and performance
Market sentiment during the month was shaped by escalating trade tensions, with the United States imposing tariff measures on multiple countries and sectors, including commodities such as steel and aluminium, and eventually the automotive industry. A succession of policy revisions, exemptions and suspensions added to the uncertainty, eroding confidence in both business and consumer sectors, the regulator added.
These developments triggered concerns about a slowdown in global economic growth, with heightened risks of recession or stagflation in the United States. In contrast, sentiment in Europe improved following Germany’s announcement of large-scale investment plans in defence and infrastructure, which supported a significant appreciation of the euro against most major currencies.
Despite some positive regional indicators, equity fund categories posted overall negative returns. Losses were particularly steep among US equity funds, which were further affected by a nearly 4% depreciation in the US dollar. Nonetheless, equity strategies continued to attract net inflows, with European and Eastern European equities drawing the strongest investor interest.
Interest rates and bond market outcomes
Monetary policy developments had a mixed influence on performance. The European Central Bank interest rates by 25 basis points for the sixth consecutive month, while the US Federal Reserve held rates steady but indicated a willingness to consider future cuts amid persistent economic uncertainty. However, these policy moves were largely overshadowed by the ongoing impact of trade-related disruptions.
Emerging market strategies registered the weakest returns, affected by subdued growth forecasts and currency pressures linked to US tariff actions. European bond funds also reported losses, driven by a steepening yield curve in response to anticipated increases in long-term financing requirements. Despite this, credit spreads remained broadly stable throughout the month.
Fixed income strategies continued to attract capital, with the euro-denominated money market category receiving the highest level of inflows, the CSSF stated.