There were 31,982 mutual funds registered for sale in Europe as of 30 September 2015. Luxembourg, hosting 9,136 funds, continued to dominate the European fund market; followed by France where 4,631 funds were domiciled.
Third quarter peak
The number of new funds launched was the highest during a third quarter since 2011 but represented a slight slowdown compared with Q2 2015.
Since the European fund industry is enjoying high net inflows for 2015, it is surprising the industry is still cautious with regard to fund launches; according to report authors Detlef Glow, head of EMEA research, and Christoph Karg, content specialist Germany & Austria.
Mergers trumping liquidations
Q3 2015 marked the first time in five years that the number of merged funds exceeded the number of liquidated funds during a third quarter, albeit very marginally.
Liquidations dropped sharply between Q3 2013 and Q3 2014, but experienced a very modest decline between Q3 2014 and the same quarter in 2015.
Mixed and Other funds were the only two fund types where liquidations outnumbered mergers in Q3 2015. Other funds includes real estate, commodity, guaranteed, and funds of hedge funds.
There have been a number of mergers between asset managers over the last few years, which has led to a number of duplications in the respective product ranges that need to be cleared to achieve economies of scale. In addition, there is still a lot of pressure on asset managers with regard to profitability, which is also driving the clean-up of the product ranges, the report stated.
Glow and Karg predict that the consolidation of the European fund industry might continue for the foreseeable future. Even a supportive market environment, with rising equity and bond markets, might not stop this trend.