Financial sector surpasses the 4 billion dollar milestone.
The German fund industry, as of mid-year, manages a total of 4.086 trillion euros in assets. A significant portion of these funds is allocated towards sustainable investments, with 361 billion euros being managed in sustainable funds [1].
Of these sustainable funds, 251 billion euros are in public funds and 110 billion euros are in special funds. Notably, mixed funds, which are a subcategory of public funds, hold 34 billion euros in sustainable assets [2].
Equity funds, on the other hand, are the largest group of public funds, with a volume of 576 billion euros. In the first half of the year, equity funds led the sales list for open public funds, attracting 35.3 billion euros in inflows [3]. This is the highest inflows into equity funds since 2000, when they reached 42.7 billion euros [6].
Equity ETFs were also popular, receiving 15.9 billion euros in the first half of the year [4]. Real estate funds followed closely, with 4 billion euros in inflows, placing them in third position in terms of new business [5].
The inflows in the first half of 2023 accounted for 8% of the equity fund assets at the beginning of the year, which is lower than the 24% in the first half of 2000 [7]. However, the current trend within German public funds shows significant inflows and growing asset allocation towards equity and sustainable funds.
This trend is driven by large government investment initiatives and improving market sentiment. German equities, represented by indices like the DAX and MDAX, have experienced strong performance with around a 20% year-to-date increase [4]. This growth is attributed to easing trade tensions and robust fiscal policies.
Simultaneously, there is a clear emphasis on sustainable investments, supported by the government's massive Climate and Transformation Fund (€100 billion) within the broader €500 billion Special Fund aimed at infrastructure, climate-friendly industry, and green energy [1][2][5]. This fund directly supports sustainable projects, fueling inflows into sustainable public funds.
The massive €500 billion Infrastructure Special Fund drives public investment towards key sectors, indirectly boosting related funds invested in infrastructure, climate, and digitalisation [1][2]. Investor optimism is further reinforced by fiscal measures such as tax relief, accelerated depreciation incentives, and regulatory reforms that create a conducive environment for fund inflows into equity and sustainable assets [4][5].
In summary, German public funds are trending towards increased allocations in equity—particularly German blue-chip stocks—and sustainable assets, supported by large-scale, government-backed investment programs targeting climate transition and modernisation of infrastructure. This combination is attracting both domestic and international capital into these fund categories.
Actively managed funds received 19.4 billion euros in the first half of the year, while open public funds held 1.354 trillion euros of these assets, and open special funds held 2.084 trillion euros of these assets [8]. Article-8 funds and Article-9 funds, classified as sustainable according to the EU disclosure regulation, account for the sustainable funds.
References:
- Bundesregierung
- KfW
- BVI
- Deutsche Börse
- BMWK
- BVI
- BVI
- BVI
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