Monthly report / Fund inflows recover as political instability eases
- Clearstream’s Investment Funds business notes strong growth in investment funds and ETFs due to increased customer demand
- Thought leaders will discuss future of the fund industry at Clearstream’s Annual Fund Summit on September 28 in Luxembourg
The funds industry is back on track, after quite some time of reduced inflows into UCITS and alternative investment funds (AIFs). Following the Brexit vote and the U.S. presidential election, financial markets witnessed marked volatility, resulting in reduced investment inflows. Flows have however picked up again against a backdrop of easing political instability, signs of economic recovery and new regulatory requirements leading to a growing need for transparency and efficiency in investment funds processing.
Centralised solutions, such as Clearstream’s Vestima platform, support market participants’ efforts to comply with new rules on risk mitigation and ease cross-border distribution of ETFs. A number of new customers have therefore migrated their Mutual and Hedge Funds as well as ETF portfolios to the company’s infrastructure over the past months, among them Edmond de Rothschild (Suisse) S.A. and Vontobel. Compared to last year, Clearstream’s business for Investment Funds Services has grown by 17 percent in terms of securities deposited and by 24 percent in number of transactions.
“There are some game-changing, even existential, issues facing the funds sector”, says Deutsche Börse Group Executive Board Member and Clearstream Chairman Jeffrey Tessler, referring to looming macroeconomic and policy risks.
“The ECB now looks set to join the Fed in normalising policy after years of quantitative easing. What will an ECB ‘taper’ mean for currently elevated asset values? And will the new normality further intensify strong competitive and cost pressures on fund managers?,” asks Tessler.
These and other topics like the ambiguity between active and passive asset management will be elaborated during Clearstream’s 2017 Annual Fund Summit on September 28th in Luxembourg. Once again, this event brings together many of the fund industry’s thought leaders to discuss the latest trends and developments impacting the sector.
|Change (%)1||YTD 2017||YTD 2016||Change (%)1|
|International business (ICSD)|
|Securities deposits (EUR bn)||6,600||6,711||-2%||6,726||6,730||+0%|
|Number of transactions (mn)||3.7||2.9||+28%||29.2||23.1||+26%|
|Domestic business (CSD)2|
|Securities deposits (EUR bn)||4,547||4,442||+2%||4,522||4,412||+2%|
|Number of transactions (mn)||8.0||6.2||+28%||59.9||52.1||+15%|
|Investment Funds Services (IFS)|
|Securities deposits (EUR bn)||2,222||1,930||+15%||2,173||1,864||+17%|
|Number of transactions (mn)||1.8||1.6||+13%||15.0||12.1||+24%|
|Assets under Custody (EUR bn)||13,369||13,083||+2%||13,421||13,006||+3%|
|Global Securities Financing (GSF)|
|Volume outstanding (EUR bn)||451.6||514.2||-12%||466.3||527.3||-12%|
1 Due to rounding, growth rates cannot be calculated from figures in the chart.
2 On 6 February 2017, Clearstream Banking Frankfurt has transferred its settlement volume to the pan-European securities settlement platform TARGET2-Securities. Since 7 February 2017, German settlement volume is processed solely via T2S.