Third-party mutual funds still account for more than 60 percent of European cross-border mutual funds, but their market share is declining due to the expansion of captive/affiliated and institutional/direct distribution channels.
So reports Cerulli Associates in a new 172-page report, “European Distribution Dynamics 2013: Navigating a Fragmented Marketplace.”
“[Third-party funds] are coming under pressure as European distributors have sought to do more via their captive asset management units, primarily as they seek to bolster profitability,” says Cerulli Associates’ Senior Analyst Angelos Gousios.
The report indicates that the captive/affiliated channel accounts in 2013 for 15.7 percent of cross-border mutual funds, up from 13.8 percent in 2012. The share of the direct/institutional channel has also risen to 22.7 percent from 19.1 percent a year earlier.
The market share of third-party mutual funds, in contrast, dipped to 61.6 percent from 67.2 percent over the same period.
The report adds that promotion of cross-border funds is universally favored by asset managers as one of several tools for expanding into new markets. The ranking of tools are as follows:
Promote cross-border funds (100 percent of respondents)
Creation of new share classes (42.9 percent)