key figures Research Department
1. Summary statistics Open-end funds Mandates The recent mkt recovery, some tentative explanations 2. The European Investment Fund Industry Net assets & sales by fund / fund group domicile 3. Savings & Wealth Household saving rate: trend & int l comparison Household financial portfolio & private pension plans
1. Summary statistics Open-end funds Mandates The recent mkt recovery, some tentative explanations 2. The European Investment Fund Industry Net assets & sales by fund / fund group domicile 3. Savings & Wealth Household saving rate: trend & int l comparison Household financial portfolio & private pension plans
The Italian AM market (Jan 2014:Dec 2014) AuM, net flows & performance, bn. 4
Net flows (monthly data) 20 18 16 14 12 10 8 6 4 2 0 2 4 6 Jan Feb Mar Apr May Jun bn 2012 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2013 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2014 Jul Aug Sep Oct Nov Dec Monthly data. Source: Assogestioni. 5
Product breakdown +27.0 +19.3 IV +0.44 +19.7 III 43 +0.44 IV +25.4 II 2014 I Open end Funds 684 43% 4% 44 3% 0.06 +0.12 2014 I II III Closed end Funds Retail Mandates (discretionary portfolios) +3.2 114 7% 744 47% Institutional Mandates +9.2 +2.3 IV +9.1 IV +2.1 III +10.4 III +2.1 2014 I II +2.9 2014 I II 6
Long term trend bn, yearly data. Source: Assogestioni. 7
AuM (Dec 2014) Top 15 Groups Net flows 2014 2013 0% 3% 6% 9% 12% 15% 18% 21% 24% 0% 5% 10% 15% 20% 25% GENERALI EURIZON CAPITAL BANCA FIDEURAM PIONEER INVESTMENTS POSTE ITALIANE ANIMA HOLDING ALLIANZ UBI BANCA MEDIOLANUM AMUNDI BANCO POPOLARE AZIMUT BNP PARIBAS AXA ARCA FRANKLIN TEMPLETON bn 2% 3% 4% 4% 8% 420 240 61% 73% 82% 0 40 80 120 160 200 Funds 26% 15% 0 4 8 12 16 20 24 28 32 Mand. x%: Mkt share + 0 3 6 9 12 15 Net sales as % AuM 8
Open-end funds: domicile breakdown Dec 2010 460 Dec 2013 20% 38% 30 20 42% +15.6 +19.6 557 2014 Domestic +32.2 R trip/offshore +30.7 Foreign +28.5 Dec 2014 684 29% 41% 42% 20 30% 10 +5.1 +4.6 +10.5 +10.7 15 0 10 10 20 13.8 5 30 40 34.5 4.0 2011 2012 2013 2014 I 2014 II 2014 III 2014 IV 0 AuM & net flows, bn. 9
EURIZON CAPITAL BANCA FIDEURAM PIONEER INVESTMENTS GENERALI ANIMA HOLDING MEDIOLANUM FRANKLIN TEMPLETON AZIMUT ARCA JPMORGAN UBI BANCA INVESCO SCHRODERS PICTET AMUNDI BANCO POPOLARE bn Top 15 Groups (open-end funds only) 2% 3% 4% 6% 6% 9% 11% 15% 5% 52% 69% 80% 0 10 20 30 40 50 60 70 80 90 100 110 Domestic AuM (Dec 2014) Net flows 2014 2013 0% 10% 20% 30% 40% R trip/offshore Foreign x%: Mkt share + +61% 0 4 8 12 16 0% 6% 12% 18% 24% 30% Net sales as % AuM +40% +41% +46% 0 1 2 3 4 5 6 10
Asset Class breakdown TOTAL 21% 6% 4% 44% 23% DOMESTIC 9% 4% 44% 35% 207 bn 32% R TRIP/OFFSHORE 21% 5% 43% 25% 248 bn 38% FOREIGN 34% 3% 47% 9% 197 bn 30% 0% 20% 40% 60% 80% 100% Equity Balanced Money Market Bond Flexible Hedge December 2014. 11
AuM (Dec 2014) Equity & balanced funds Net flows 2014 2013 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% ITALY EURO AREA 4% 4% EUROPE 21% AMERICA 18% PACIFIC AREA 7% EMERGING MKTS 12% SPECIAL. COUNTRY 6% GLOBAL 15% SPECIAL. SECTOR OTHER 4% 9% 82% BALANCED bn 0 5 10 15 20 25 30 35 40 45 0 2 4 6 8 10 12 0 2 4 6 8 Domestic R trip/offshore Foreign x%: Mkt share + Net sales as % AuM 12
Money mkt, Bond, Flex & Hedge funds AuM (Dec 2014) Net flows 2014 2013 0% 10% 20% 30% 40% 50% 0% 8% 16% 24% 32% 40% MM FUNDS ITALY 3% EURO GOV. SHORT T. 9% EURO GOV. M/L TERM 13% EURO CORPORATE / HY 11% DOLLAR AREA 3% GLOBAL 7% EM MIXED 5% 11% +65% SPECIALIZED 19% FLEX (BOND) 19% FLEX +42 HEDGE bn 0 20 40 60 80 100 120 140 160 0 2 4 6 8 10 0 6 12 18 24 30 Domestic R trip/offshore Foreign x%: Mkt share + Net sales as % AuM 13
Net & gross flows Net ( bn) 30 100 90 Gross ( bn) 20 80 70 10 60 50 0 40 30-10 20 10-20 0 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 50% 40% 30% 20% Gross Sales Gross Redemptions Net Sales Funds w/net Sales>0 14
The blockbuster effect : top quartile funds take all 50 40 30 20 10 0 10 20 30 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 Net flows, bn. I II III IV Top 1% New Stories 15
New stories: they sell well... but how long? 16 14 12 10 8 6 4 2 0-2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 Curr. +1Q +2Q +3Q Newly launched funds ( new stories ): net flows in current & following 3 quarters. bn. 16
New stories tag cloud Year 2011 2012 2013 2014 New funds 536 578 560 456 INDEX CONVERTIBLE EMERGING SELECTION COUPON EQUITY MONEY CONVERTIBLE COUPON CASH EQUITY CEDOLA FORMULA MONEY BOND ETF CORPORATE CASH STRUCTURED PROTETTO BREVE MONET 20 ASIA LIQUID SELECTION EMERGING PROTETTO SELECTION CEDOLA BOND 20 BREVE CONVERTIBLE COUPON FORMULA ETF MONET CORPORATE INDEX STRUCTURED ASIA EQUITY LIQUID CASH CORPORATE 20 CEDOLA EMERGING MONET FORMULA BOND SELECTION STRUCTURED EQUITY LIQUID MONEY INDEX BREVE ASIA ETF PROTETTO BOND 20 CONVERTIBLE STRUCTURED CORPORATE ETF BREVE CASH MONET PROTETTO MONEY CEDOLA ASIACOUPON FORMULA LIQUID EMERGING INDEX 17
Mandates: AuM & Net Sales trends AuM (Dec 2014) Net flows 2014 2013 0% 10% 20% 0% 2% 4% 6% 8% 10% DISCRETIONARY MANDATES (GPF) 3% DISCRETIONARY MANDATES (GPM) 10% PENSION PLANS 9% INSURANCE PRODUCTS (TRADITIONAL) 523 61% +25.2 INSURANCE PRODUCTS (UNIT & INDEX L ED) 8% OTHER 9% bn 0 20 40 60 80 100 0 5 10 Foreign Co. Domestic Co. x%: Mkt share + 0 3 6 9 12 15 Net sales as % AuM 18
Top 15 Groups (mandates only) AuM (Dec 2014) Net flows 2014 2013 0% 4% 8% 12% 16% 20% 24% 0% 5% 10% 15% 20% GENERALI EURIZON CAPITAL BANCA FIDEURAM POSTE ITALIANE PIONEER INVESTMENTS ALLIANZ AXA UBI BANCA BANCO POPOLARE AMUNDI ANIMA HOLDING CREDIT SUISSE CREDITO EMILIANO BNP PARIBAS STATE STREET MONTEPASCHI bn 1% 2% 3% 3% 5% 6% 356 42% 138 7% 77% 87% 92% 0 10 20 30 40 50 60 Retail 15% 0 3 6 9 12 15 18 Instit. x%: Mkt share + +34% 0 2 4 6 8 Net sales as % AuM 19
The market for Institutional Mandates Insurance products Managed by ManCos Pension funds As is... (2014 Q3) 502 39% 183 As is... (2014 Q3) 79%... and as could become: Household portfolio: share of insurance products & pension funds (2014Q3) IT FRA GER UK USA 18.5% 33.5% 30.9% 57.4% 33.4% Source: ANIA, Covip, Adepp, Assogestioni, Eurostat, OECD. 20
Despite the economic crisis which is still affecting heavely our country, and despite the fall in the household saving rate, net flows into funds and mandates are rebounding. Why? Some tentative explanations that can be drawn looking at the general features of the market (1), savers (2 & 3), distributors (banks, 4 & 5) and management companies (6).
1. A pro-cyclical market MSCI WORLD (Loc) bn, yearly data. Source: Assogestioni, MSCI. 22
2. Wealth is concentrated top tier investors hold most of the money pot (italian funds, 2013) Average investment Median investment 26.156 10.867 Average Median x 2.5 Quartile % of assets Limit ( ) 1,4 6,9 17,3 74,4 3.868 10.867 27.932 25% of shareholders control 75% of assets 75% of shareholders invest less than 27k Italian funds. Source: Assogestioni 23
3. Bank deposits pay low interests 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dec Interest rates on bank deposits, households. Source: Bank of Italy. 24
4. Banks are becoming less dependent on funding from retail 30 20 10 0 10 20 30 40 2007 Q1 Q2 Q3 Q4 2008 Q1 Q2 Q3 Q4 2009 Q1 Q2 Q3 Q4 2010 Q1 Q2 Q3 Q4 2011 Q1 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2014 Q1 Q2 Q3 Retail Bank Bonds Domestic and Round Trip Funds Foreign Funds Quarterly flows, bn. Source: Assogestioni, Bank of Italy. 25
5. Decrease in net interest margin 25 10 20 9.5 15 9 10 8.5 5 8 0 5 7.5 10 7 15 6.5 20 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 6 Domestic and Round Trip Funds (l.) Foreign Funds (l.) Net interest margin (Top 5 Banking Groups) (r.) bn. Source: Assogestioni, bank balance sheets (Top 5 groups). 26
6. The success of funds with high margins (target-date funds) MM FUNDS AuM (Dec 2014) Net flows 2014 2013 0% 10% 20% 30% 40% 50% 0% 8% 16% 24% 32% 40% ITALY 3% EURO GOV. SHORT T. 9% EURO GOV. M/L TERM 13% EURO CORPORATE / HY 11% DOLLAR AREA 3% GLOBAL 7% EM MIXED 5% 11% +65% SPECIALIZED 19% FLEX (BOND) 19% FLEX +42 HEDGE bn 0 20 40 60 80 100 120 140 160 0 2 4 6 8 10 0 6 12 18 24 30 Domestic R trip/offshore Foreign x%: Mkt share + Net sales as % AuM 27
1. Summary statistics Open-end funds Mandates The recent mkt recovery, some tentative explanations 2. The European Investment Fund Industry Net assets & sales by fund / fund group domicile 3. Savings & Wealth Household saving rate: trend & int l comparison Household financial portfolio & private pension plans
Net Assets by fund domicile 3,095 +18% +10% 11,232 +15% +9% +13% 1,582 +9% 1,571 +3% +1% 1,303 +16% +16% 1,661 +24% +9% 72% Ucits Non Ucits : 14 M12 Growth 13 rate 90% Spezialf. 25% MMFs 422 +18% +20% 254 +22% +10% Germany 14% France 14% UK 12% Switzerland 4% Italy 2% Luxembourg 28% Ireland 15% Europe 100% 46% 43% 2014 December bn. Source: Efama, AFG, BVI. 29
Net Assets by fund domicile Long-term growth 600 500 400 300 200 100 Ireland Luxembourg UK France Germany Italy 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q3 Index values. Source: Efama. 30
Net sales by fund domicile Italy 5% 3% 1% +1% +3% +5% France 5% 3% 1% +1% +3% +5% Germany 5% 3% 1% +1% +3% +5% 14% 10% I II 2014 III II +5.4% +28 IV I III +11 2013 II I IV III 12 2012 2011 2010 2009 7% 6% 2 75 24 +57 +87 +78 +8% UK 5% 3% 1% +1% +3% +5% Luxembourg 5% 3% 1% +1% +3% +5% Europe 5% 3% 1% +1% +3% +5% I IIIII II III III II IV I I IV +27 2014 +27 2013 +31 2012 +8% 2011 2010 2009 +210 +194 +123 +9% +493 +410 +307 Net sales as a % of AuM. Yearly data in bn. Source: Efama, BVI. 31
Net sales by fund domicile & asset class Italy 5% 3% 1% +1% +3% +5% France 5% 3% 1% +1% +3% +5% Germany 5% 3% 1% +1% +3% +5% 4% 1% 1% 8% 2014 10% II III I III IV I II 4.5% I IV III II 2013 2012 2011 2010 2009 3% 6% 4% +1% 7% UK 5% 3% 1% +1% +3% +5% Luxembourg 5% 3% 1% +1% +3% +5% Europe 5% 3% 1% +1% +3% +5% III II 2014 IV I III 2013 IV III III II I 1% 3% 4% 3% 2012 2011 4% '10 2% '09 3% 4% 2% Equity+Balanced +Flexible Bonds+MM Others+Non Ucits Net sales as a % of AuM. Source: Efama, Assogestioni, BVI. 32
Net Assets by fund group domicile 3,007 59% 11,057 1,827 +5% +3% 2,030 +10% +8% Exp 10% 2,288 +18% +15% Exp > 90% 903 +13% +12% 1,600 44% Domestic Funds Ucits Domestic Funds Non Ucits Luxembourg Funds Irish Funds 477 +18% +12% 14 :Q3 Growth rate 13 France 13% Germany 24% UK 44% Switzerland 51% Italy 49% Luxembourg Ireland Europe 2014Q3. bn. Foreign (Round-trip) share in %. Est. on Efama, Assogestioni, ALFI & IFIA data. 33
Net sales: fund domicile vs. fund group domicile Italy 5% 3% 1% +1% +3% +5% France 5% 3% 1% +1% +3% +5% Germany 5% 3% 1% +1% +3% +5% 10% 9% I II 14% 2014 IV III III I II IV III I II 2013 20% 2012 2011 2010 2009 8% 7% 6% +7% UK 5% 3% 1% +1% +3% +5% Luxembourg 5% 3% 1% +1% +3% +5% Europe 5% 3% 1% +1% +3% +5% III IV II I IV III III II I II I +10% +13% 2014 2013 2012 2011 2010 2009 +9% Net sales as a % of AuM. Fund domicile (blue), fund group domicile (black). Est. on Efama, Assogestioni, ALFI, IFIA & BVI data. 34
1. Summary statistics Open-end funds Mandates The recent mkt recovery, some tentative explanations 2. The European Investment Fund Industry Net assets & sales by fund / fund group domicile 3. Savings & Wealth Household saving rate: trend & int l comparison Household financial portfolio & private pension plans
Household saving rates in Europe 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Q3 0% EU avg Italy Germany France UK Gross household saving rates. Source: Eurostat. 36
How income & consumption Δ% affect saving rates 1.5% 1.0% consumption 0.5% 0.0% 16% 14% 12% 13.7% Italy 12.0% -0.5% 10% 8% -1.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 2009 2010 2011 2012 2013 2014 Q3 income 2008Q4:2014Q3. Source: Eurostat. 37
How income & consumption Δ% affect saving rates 1.5% consumption 1.0% 0.5% 0.0% -0.5% -1.0% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% income 18% 17.0% 16% Germany 16.4% 14% 12% 10% 18% 16% 14% 12% 10% 14.7% France 2009 2010 2011 2012 2013 15.1% 2014 Q3 2008Q4:2014Q3. Source: Eurostat. 38
How income & consumption Δ% affect saving rates 1.5% 1.0% consumption 0.5% 0.0% 8% 6% UK 8.2% -0.5% 4% 5.4% 2.2% -1.0% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% income 2% 2009 2010 2011 2012 2013 2014 Q1 2008Q4:2014Q1. Source: Eurostat. 39
Household financial portfolio breakdown Italy Total Asset bn Currency & deposits Total Bonds Issued by banks Total Stocks Listed Investment funds Pension funds & life pr 1995 1,797 38.3 22.7 1.9 19.3 2.8 5.8 8.8 2000 3,042 22.9 16.5 6.4 29.5 5.4 17.0 10.0 2005 3,713 24.6 19.8 7.4 25.3 2.5 11.5 14.7 2010 3,732 29.9 19.1 10.0 22.4 1.9 7.2 17.1 2012 3,775 31.2 18.7 9.9 21.2 1.5 7.2 17.6 2013 3,873 31.1 16.1 8.4 23.1 1.6 7.8 18.0 2014 Q3 4,016 30.4 14.8 6.3 23.3 1.7 9.2 18.5 France 4,713 28.2 1.7 n.a 21.5 3.9 6.5 33.5 Germany 5,175 39.1 4.0 n.a 9.8 4.6 9.4 30.9 UK 7,328 24.5 0.7 n.a 9.1 7.1 4.0 57.4 USA 53,053 13.5 4.8 n.a 33.1 n.a 13.1 33.4 %. Source: Eurostat, OECD, BCE, Deutsche Bundesbank. High level of direct investment (~ 40%) Significant amounts of bank issued bonds (7.5%) Negligible level of listed shares. High level of unlisted ones. Funds: rise until 1999 (18%) then down, then again up. Pensions/life product: up but still too modest. 40
Managed products in household portfolios Investment funds Pension funds & life products 20% 18% 16% 14% 12% 10% abnormally high? 60% 50% 40% 30% 8% 6% too low? 20% 4% 10% 2% 0% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Q3 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Q3 0% Italy France Germany United Kingdom USA Source: Eurostat, OECD, BCE, Deutsche Bundesbank. 41
Public Pensions (1st pillar) Cost (% GDP) Future substitution rates Old-age pensions 1 3 2 4 Today 1 ante L 243/2004 2 ante DL 78/2010 90% 71 85% 70 80% 75% 69 70% 65% 68 60% 67 55% 50% 66 45% 3 ante DL 98/2011 4 ante DL 201/2011 40% 65 2010 2020 2030 2040 2050 2060 Age Private sector employee Self employed Source: Ragioneria Generale dello Stato. 42
Private sector employees: failure of automatic enrolment 13.7m 341K 13.5m 312K Opt-Out 301K 12.4m 266K 4% 226K 7% 292K 7% 1.2m 16% 4% Not Enrolled 84% 15% 6% 17% 68% 32% Enrolled 4.4m Dec 2006 2007 2008 2009 2010 2011 2012 2013 Dec 2013 New members: Automatic Enrolment Voluntary Enrolment Source: est. based on Covip data. 43
Private pension plans at a glance (2nd & 3rd pillar) 2013 2008 Working pop. Membership Membership (,000) (est.) rate rate Member breakdown 6,204 22,420 28% 21% Private sector employees 4,356 13,543 32% 26% Public sector employees 160 3,335 5% 4% Self employed 1,688 5,542 30% 19% 2013 Members Assets (,000) % '13 % 5y % ( m) % GDP Vehicle breakdown 6,204 100% +6% +28% 116,443 7.5% Contractual p.f. 1,951 31% 1% 5% 34,504 Open p.f. 985 16% +8% +24% 11,990 Ind. Insurance Plans (PIP) 2,639 42% +14% +92% 19,513 Ante 1993 p.f. ('pre existing') 655 11% 1% 3% 50,376 Source: Covip, Istat, RGS. 44
key figures Research Department