The number of funds has been in gradual decline since the first quarter of 2011 with the lowest net growth in the second quarter of 2012.
For the third quarter of 2013 mergers and liquidations went down, while at the same time there was a small increase in fund launches.
Over the quarter, 442 funds were created in Europe, while 458 funds were liquidated and 255 funds were merged (a total decline of 271). This contrasts with the low point in the second quarter of 2012, which saw with 340 mergers, 535 liquidations, and just 417 newly launched funds (a total decline of 458 products).
Equity funds still dominate funds across Europe, making up 37% of the funds available for sale, followed by mixed-asset, or multi-asset, funds at 26%.
Mixed-asset funds are the only sector to see an overall net increase over the past quarter. Bond funds stood at 22%, while money market funds represented 4% of the market. The remaining 11% of “other” funds were real estate funds, commodity funds, guaranteed funds, unclassified, and funds of hedge funds. This latter category saw the most significant decline over the quarter.
Detlef Glow, head of Lipper EMEA Research, said that regulation remains a significant driver for the consolidation of funds.
He argued the revision of money market fund regulation is likely to have the most impact in the short-term: "As of now it is not clear how the products might be regulated when the process is finalised, but the changes might have a massive impact on this asset class. European money market funds will hold approximately 22% of all short-term bonds issued by the governmental or the corporate sector as well as approximately 38% of the short-term bonds from the banking sector."
