Dutch investment funds saw their assets under management increase by 6.6% (EUR 46 billion) to EUR 739 billion in the third quarter of 2014, driven mainly by exchange gains and new deposits. The latter were highest for bond funds.
The increase lifted assets managed by investment funds to unprecedented levels for the fifth consecutive quarter (Figure 1). Half of the third-quarter growth was caused by price and exchange gains (EUR 23 billion, or 3.3% of assets under management). Of that amount, three-quarters were exchange gains caused by the euro's depreciation. This effect was a major factor in total returns on investment (which includes investment returns such as interest and dividends) landing at 3.9% on a quarterly basis, nudging down from the 4.1% posted in the previous quarter.
Figure 1: Investments of Dutch investment funds
Net deposits were EUR 12.5 billion (1.8% of assets under management) in the third quarter, relative to EUR 4.8 billion (0.7% of assets under management) in the previous quarter. New deposits were primarily attributable to institutional investors, reflecting the important role which investment funds play as intermediaries in large asset managers' investment strategies. In addition, the inflow was caused in part by the fact that insurance funds have been opened up to external investors, which means they are now included in the statistics.
Bond funds were favoured most, showing net deposits of EUR 5.7 billion, while EUR 0.2 billion was invested in equity funds. This picture is contrary to that observed in the previous two quarters, when a markedly higher amount of capital flowed into equity funds than into fixed-income funds (Figure 2). At EUR 3.4 billion, the 'other funds' category also enjoyed substantial inflow in the third quarter of 2014. A significant portion of this category represents funds investing in commodities and mortgage loans.
Figure 2: Deposits into Dutch investment funds by investment category