A popular area for asset managers to launch new funds in is European Small & Mid-Caps. More than half of the 34 new European equity funds launched in the first three months of this year focus on small and mid-cap companies. European small caps were the best performing asset class last year, delivering average returns of about 30%.
Small cap fund launches spike
The fund launching pattern reflects more or less the sentiment among fund selectors. While the majority of fund buyers across Europe plan to increase their allocation to European stocks, appetite for emerging market equities is much lower, though recent Expert Investor Europe conferences in Germany and Finland hint at a turn in sentiment towards the latter asset class. During the first quarter, 15 emerging market equity funds were started.
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The number of bond fund launches stayed more or less stable, with considerably more launches focusing on emerging market debt than on developed market bonds. This, in turn, is in line with asset managers’ strategic planning for 2014. According to a survey by Cerulli Associates in seven European countries, emerging market debt fund feature prominently on the launching list of most asset managers (see chart).
Multi-asset funds
Asset managers are also planning to bring more multi-asset funds to the market. In all countries surveyed by Cerulli, they feature prominently on their launching list. According to Lipper, 168 mixed asset funds were launched in the first quarter of this year, some 51% more than in the same period last year.
