The bank’s latest attempt to map the scale of the world’s financial market put the value of the world’s total of financial assets at $294trn in 2014 up from $285trn in the previous year.
An increase in global stock market capitalisation to $68.7trn, largely driven by growth in funds targeting Japan, US and western European equity markets, and a rise in holdings of US, German and Swiss bonds, offset the decline in assets in emerging markets – a trend that has continued in 2015.
However, Deutsche Bank said “the increase in the stock of global financial assets has not helped the volume of turnover in equity and bond markets, which remain below the 2011 peak”.
Leaving EM in droves
Investors quit the emerging markets in droves last year as growth rates faltered and the prospects of developed markets markedly improved as easier monetary policies began to bite.
In 2014 the percentage of assets, including ETFs, held by equity funds in Latin American stocks declined by 17%, while assets of Japanese equity funds grew by 7%. Assets held by bond funds in Asia ex-Japan debt fell by 13% in the same period as assets held by German bond funds grew by 15%.
In all, the amount of net private capital inflows in to emerging market economies last year dropped to its lowest level since 2009.
The total net assets of the mutual fund industry reached $31.3trn up from $30trn in 2013 with nearly 50% of the total in the US, while hedge fund assets extended their strong growth since the onset of the financial crisis witnessing further gains in 2014.
Oil rich countries continue to dominate the rankings of sovereign wealth funds, which controls about $7trn of investments, although Norway’s Government Pension Fund remains the world’s largest and the China Investment Corporate (CIC) is now the world’s fourth largest sovereign fund.
