Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CONTEXT

This situation has evolved substantially since the pre-crisis era. Many countries, including those in the Nordic region, have decreased the proportion of funds in their household fi- nancial wealth in recent years. Swedish households held 26.1% of their wealth in funds in 2006, the highest proportion in Europe, and are now down to 11.6%. Similarly, French house- holds currently hold 8% of their assets in funds, losing more than half their penetration rate (which was 20.4% at the end of 2006). Taking the American mature mutual fund market as a reference for comparison, US households invested 18% of their wealth directly into funds in 2006, and are now down “only” by 3 to 4%, stabilising around 15%. The leitmotiv among all European countries is that the direct fund investment ratio de- creased in most of them. This can be seen as a direct short-term consequence of the finan- cial turmoil. And thus, even though cumulated investment fund acquisitions in the 2005-2009 period remains negative (- € 139bn), it may be not so daring to predict, when new data flows are available for the end of 2010, that the private households’ demand for investment funds will be tending to reach its previous levels of 11 to 12% share of funds within households’ total financial portfolios in the Euro zone. Furthermore, if the USA stabilise around 15% of total financial households assets held directly in funds, European penetration levels for in- vestment funds may also tend to converge to the American ones in a few years time.

1.2.3

Direct sales of funds to the retail sector, an analysis by distribution channel

Today the European fund distribution landscape is very different from one country to ano- ther as seen in the previous analysis of penetration of open architecture. Table 1 displays the weight of the different distribution channels in France, Germany, Italy, Spain, Switzer- land and the UK.

The European fund distribution landscape today is very different from one country to another.

Table 1: European assets by distribution channel 13

DISTRIBUTION CHANNEL

FRANCE GERMANY

ITALY

SPAIN SWITZERLAND UK

Retail Bank

21.3% 44.4% 54.3% 63.3% 11.6% 2.3%

Private Bank/Discretionary 10.9% 13.5% 13% 8% 51% 6% Insurance 13.5% 16.4% 13.5% 5% 8% 12.4% IFA/Advised 8.3% 7.4% 6% 4.3% 6% 55.6% Supermarket 0.3% 0.5% 0.3% 0.2% 1.5% 1.5% Direct 0.5% 0.2% 0.2% 0% 1.5% 0.5% Funds of Funds 11.2% 13.6% 5.1% 7.2% 6.4% 9.2% Institution/Corporate 34% 4% 7.6% 12% 14% 12.5% Total 100% 100% 100% 100% 100% 100%

Source: Lipper FMI data digest, 2010

13 Note on the data used: Lipper FMI’s data displays the proportion of fund distribution controlled by each channel, with the retail banking channel split out further to show funds of funds sales and institutional or corporate sales separately. The category of insurance wrapper also includes sales through bancassurance. Therefore the figure for retail banks includes only funds offered by the bank itself as such.

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