Global situation of undertakings for collective investment at the end of July 2024

2024-08-30 16:38:34 · CSSF

I. Overall situation

As at 31 July 2024, the total net assets of undertakings for collective investment, comprising UCIs subject to the 2010 Law, specialised investment funds and SICARs, amounted to EUR 5,619.217 billion compared to EUR 5,582.271 billion as at 30 June 2024, i.e. an increase of 0.66% over one month. Over the last twelve months, the volume of net assets increased by 7.16%.

The Luxembourg UCI industry thus registered a positive variation amounting to EUR 36.946 billion in July. This increase represents the sum of positive net capital investments of EUR 12.450 billion (+0.22%) and of the positive development of financial markets amounting to EUR 24.496 billion (+0.44%).

The development of undertakings for collective investment is as follows:

The number of undertakings for collective investment taken into consideration totalled 3,211, against 3,228 the previous month. A total of 2,102 entities adopted an umbrella structure representing 12,670 sub-funds. Adding the 1,109 entities with a traditional UCI structure to that figure, a total of 13,779 fund units were active in the financial centre.

As regards the impact of financial markets on the main categories of undertakings for collective investment and the net capital investment in these UCIs, the following can be said for the month of July.

A series of economic indicators were published during the month, which notably pointed to a weaker-than-expected US labour market, raising concerns on the resilience of the US economy and in turn resulting in increased anticipations of monetary easing by the Fed, including a first rate cut at its September meeting.

In that context, equity markets delivered limited returns, mostly supported by small caps (which are considered to benefit more from interest rate cuts) and, contrary to previous months, dragged down by technology stocks, due to disappointing quarterly earnings and to doubts on the growth potential from IA. The largest monthly performance in euro was delivered by Japanese equities thanks to a currency effect, with a rebound by more than 5% of the yen against the euro. It followed an intervention by the Bank of Japan, as well as expectations of a normalisation of its monetary policy, which materialised at its meeting on 31 July with an increase in the reference rate by 15bps and the announcement of a quantitative tightening plan.

In July, equity UCI categories registered an overall negative capital investment, with limited inflows only for the categories US and Eastern European equities.

Development of equity UCIs during the month of July 2024*

	Market variation in %	Net issues in %
Global market equities	0.19%	-0.17%
European equities	1.07%	-0.59%
US equities	-0.49%	0.46%
Japanese equities	3.72%	-1.50%
Eastern European equities	-0.59%	0.21%
Asian equities	-1.55%	-1.24%
Latin American equities	-0.70%	-1.80%
Other equities	-0.45%	-0.12%

* _{Variation in % of Net Assets in EUR as compared to the previous month}

Against the economic backdrop described above, yields decreased during the month, resulting in gains for all the major bond UCI categories, also supported by a slight decline in credit spreads. USD money market is the sole category to report losses, due to the depreciation of the US dollar against the euro.

In July, fixed income UCIs registered an overall positive net capital investment. The largest inflows were reported by Global money market whereas USD money market reported the only significant – although limited – outflows.

Development of fixed income UCIs during the month of July 2024*

	Market variation in %	Net issues in %
EUR money market	0.30%	1.61%
USD money market	-1.02%	-0.46%
Global money market	0.16%	3.68%
EUR-denominated bonds	1.65%	0.54%
USD-denominated bonds	1.16%	1.24%
Global market bonds	1.35%	0.84%
Emerging market bonds	1.02%	-0.03%
High Yield bonds	0.78%	-0.06%
Others	0.96%	1.07%