Total assets of Dutch investment funds decreased due to net withdrawals
In the fourth quarter of 2017, total assets managed by Dutch investment funds dropped by EUR 6.7 billion, from EUR 871.8 billion to EUR 865.1 billion, mainly reflecting pension funds' withdrawals from bond funds. However, their impact was mitigated by the investment funds' positive returns.
In the fourth quarter of 2017, total assets managed by Dutch investment funds dropped by 0.8%, from EUR 871.8 billion to EUR 865.1 billion, causing invested assets to decline for the first time since 2015. The decrease was fully attributable to the developments in a single category of funds: the assets of bond funds declined by 10.6%, to EUR 239.3 billion (see Figure 1). Equity funds and real estate funds, on the other hand, saw their assets grow by 3.9% and 2.5% respectively (to EUR 333.6 billion and EUR 117.5 billion). Other funds, including infrastructure and mortgage funds, also grew, by 3.7%, to EUR 174.8 billion.
The contraction in bond funds' assets was caused by withdrawals worth EUR 23.5 billion (see Figure 2), which took place following the restructuring of pension funds' investment portfolios. Since Dutch pension funds mainly invest through investment funds, their portfolio restructuring also impact investment funds. A total of EUR 6.0 billion was deposited in the other investment categories, with the largest share invested in equity funds (EUR 2.5 billion).
The net withdrawals were largely offset by positive returns on invested assets of 2.9%, which resulted in an increase in invested assets. The highest returns were achieved by other funds (5.3%) and equity funds (4.1%). Bond funds achieved lower returns (0.9%). Within the equity fund category, the highest returns were achieved by funds with investments in Asia (6.6%) and emerging markets (5.8%). In value terms, globally investing equity funds achieved the highest returns, i.e. EUR 8.8 billion (3.9%). These returns are in line with market indices trends, e.g. the MCSI Emerging Markets Index (5.4% quarter-on-quarter) and the MCSI World Index (3.5% quarter-on-quarter).