In the second quarter of 2014, Dutch investment funds’ assets hit a record high for the fourth consecutive quarter.
Investments by Dutch investment funds rose by 4.5% (EUR 29.3 billion) relative to the first quarter of 2014, mainly due to price gains on equity investments. Equity investments increased by 7.8%, accounting for the largest growth among investment instruments (see Figure 1).
Figure 1: Investments by Dutch investment funds
Growth in the assets of Dutch investment funds was partly driven by positive net deposits of EUR 1.7 billion, EUR 1.3 billion more than in the previous quarter. Equity investment funds, with net deposits worth EUR 3.6 billion, were favourite among investors, including EUR 1.8 billion in emerging markets. Real estate funds and other funds also recorded net deposits (EUR 1.2 billion and EUR 0.4 billion, respectively). Bond funds, however, saw net withdrawals of EUR 2.4 billion. Investors also withdrew money from mixed funds (EUR 0.2 billion) and hedge funds (EUR 0.9 billion). In all but other funds, investors pursued the same investment strategy as in the previous quarter.
The largest contribution to the investment increase in the second quarter of 2014 was due to price gains. Total returns on investments (including interest and dividend) reached 4.2% quarter-on-quarter, whereas they had not exceeded 4% since the first quarter of 2012. Equity investments recorded the highest level of total returns (5.6%). Although bond funds saw negative net deposits, returns in this investment category were 3.2% (see Figure 2). Other investment categories also recorded positive total returns, with real estate funds reaching 2.8%, hedge funds 2.2% and other funds 5.1.
Figure 2:Total returns on investments by Dutch investment funds