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Swiss fund market close to CHF700bn

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The volume of assets in the Swiss funds market reached some CHF697bn in July, a marked increase of CHF20.4bn month-on-month, according to figures released by the Swiss Funds Association (SFA).

This came primarily on the back of rising equity markets and exchange rate effects.

At the end of July 2012, the total volume of assets in the investment funds covered by the statistics compiled by Swiss Fund Data and Lipper stood at CHF697.1bn, compared with CHF676.7bn in June. Of this figure of around CHF 697bn, Swiss funds for institutional investors accounted for CHF 273.5bn.

There is one change in the statistics, with the former category “other funds” now being broken down into commodities, alternative investments, and other funds.

“In addition to the good performance on the equity markets, currency effects – the strongly weakened CHF against other currencies – played a key role in the marked increase in fund assets, which are presented in CHF in the statistics. As regards the performance of investment strategy funds and other funds, it appears that investors are increasingly taking the initiative themselves when it comes to asset allocation and are less keen to operate within the risk models set by banks. Investors are apparently giving preference to funds with more flexible allocation models over traditional investment objective funds with rigid equity weightings,” says Matthäus Den Otter, chief executive of the SFA.

Net inflows totalled CHF2.4bn in July 2012. Bond funds attracted the most new money (+ CHF2.0bn), with inflows of just under CHF0.5bn into Bond USD High Yield (total volume: CHF6.8bn).

Due to a lack of alternatives, investments are currently being made worldwide in US corporate bonds with low credit ratings.

Meanwhile there were outflows from alternative investments and asset allocation funds. Volumes in both these categories have fallen steadily in the past three to five years. Many investors, including retail clients, are withdrawing their assets as the funds have failed to deliver the expected returns. Hardest hit among asset allocation funds in this regard are those funds with fixed equity weightings, where falling equity markets have led to painful losses.

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