Clearstream monthly report: Fund inflows recover as political instability eases

Clearstream’s Investment Funds business notes strong growth in investment funds and ETFs due to increased customer demand / thought leaders will discuss future of the fund industry at Clearstream’s Annual Fund Summit on September 28 in Luxembourg

The funds industry is back on track, after quite some time of reduced inflows into UCITS and alternative investment funds (AIFs). Following the Brexit vote and the U.S. presidential election, financial markets witnessed marked volatility, resulting in reduced investment inflows. Flows have however picked up again against a backdrop of easing political instability, signs of economic recovery and new regulatory requirements leading to a growing need for transparency and efficiency in investment funds processing.

Centralised solutions, such as Clearstream’s Vestima platform, support market participants’ efforts to comply with new rules on risk mitigation and ease cross-border distribution of ETFs. A number of new customers have therefore migrated their Mutual and Hedge Funds as well as ETF portfolios to the company’s infrastructure over the past months, among them Edmond de Rothschild (Suisse) S.A. and Vontobel.

Compared to last year, Clearstream’s business for Investment Funds Services has grown by 17 percent in terms of securities deposited and by 24 percent in number of transactions.

Jeffrey Tessler

There are some game-changing, even existential, issues facing the funds sector”, said Deutsche Börse Group Executive Board Member and Clearstream Chairman Jeffrey Tessler, referring to looming macroeconomic and policy risks. “The ECB now looks set to join the Fed in normalising policy after years of quantitative easing. What will an ECB ‘taper’ mean for currently elevated asset values? And will the new normality further intensify strong competitive and cost pressures on fund managers?,” asked Tessler.

These and other topics like the ambiguity between active and passive asset management will be elaborated during Clearstream’s 2017 Annual Fund Summit on September 28th in Luxembourg. Once again, this event brings together many of the fund industry’s thought leaders to discuss the latest trends and developments impacting the sector.

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