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Cross-border funds and registrations continue to rise

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Global true cross-border funds and registrations kept increasing in 2023 – according to PwC Luxembourg’s annual GFD Poster.

The total number of global true cross-border funds reached 14,725 in 2023, up from 14,607 in 2022. As for the number of global cross-border registrations, it increased by 1.6 per cent to reach 140,635 in 2023, up from 138,467 in 2022. Luxembourg remains, by far, the leader in global cross-border fund registrations with a market share of 54.6 per cent, though experiencing a minor decline by 0.4 per cent in the registrations of the Grand Duchy’s funds in 2023.

The insights come from the 24th edition of PwC Luxembourg’s Global Fund Distribution (GFD) Poster, offering a comprehensive analysis of global fund distribution trends across more than 40 countries.

Key findings include:

Overall trends

●        Luxembourg and Ireland maintain significant market share, collectively managing EUR 7.5tn in UCITS assets out of the total EUR 13.1tn European UCITS market in 2023.

●        Luxembourg’s domicile share for cross-border funds is still dominant at 54.6 per cent, while Ireland stands at 36.4 per cent.

●        Spain leads in terms of total new registrations in Europe in 2023, experiencing 262 new registrations, followed by Italy (251), Austria (225) and Denmark (217).

●        Equity funds hold the lion’s share (50 per cent) of global cross-border assets, followed by bond funds at 27 per cent.

●        UCITS funds command the majority (91.6 per cent) of global cross-border funds, with Luxembourg in the lead with 54.5 per cent, followed by Ireland with a 32.0 per cent market share.

●        Within non-UCITS true cross-border fund registrations, both Luxembourg and Ireland gained market share in 2023, increasing by 0.6 per cent and 1.0 per cent respectively.

●        Franklin Templeton and BlackRock maintain dominance in cross-border distribution, with Fidelity Investments, UBS, and JP Morgan moving up the ranks among top asset managers of true cross-border funds.

Registration Hot Spots

●        Europe: Within Europe, Spain was the top country for new registrations (262) followed by Italy (251), Austria (225), and Denmark (217).

●        APAC: Singapore retains its position as the top market for new registrations, followed by Hong Kong and Macau.

●        Middle East: The UAE further underlines its front-running position in the region with 401 registrations.

●        Africa: Although South Africa continues to have the highest number of registrations (302), the total number of funds declined by 8 in 2023.

●        Americas: Bermuda experienced significant growth with 48 new registrations, while Chile continues to lead the region in total registrations (1,754).

Sustainable Finance

●        SFDR Article 8: Luxembourg leads with 62.7 per cent of true cross-border funds under SFDR Article 8, followed by Ireland (24.9 per cent) and France (4.4 per cent).

●        SFDR Article 9: Luxembourg dominates the Article 9 market with 66.1 per cent of true cross-border funds, followed by Ireland (22.2 per cent) and France (6.3 per cent).

Robert James Glover, Advisory Partner for Global Fund Distribution at PwC Luxembourg says: “The appetite for global diversification is undeniable. We’re seeing a surge in new fund registrations, particularly in Spain, as investors seek exposure to international markets. Equity funds remain the clear favourite, holding the majority of cross-border assets. Interestingly, UCITS funds continue their reign supreme, with Luxembourg leading the pack. While Non-UCITS haven’t reached critical mass yet, the rising market share in key jurisdictions such as Luxembourg and Ireland suggests a potential shift on the horizon.”

“We saw a balanced increase of 0.9 per cent in both cross-border ETFs and mutual funds, and the number of registrations grew by 1.6 per cent compared to last year. To that end, the distribution landscape shows remarkable resilience, with growth continuing despite the headwinds of a volatile macroeconomic environment impacting the global cross-border fund distribution.”

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