Net inflows into German open-ended mutual property funds have increased significantly this year amid a surge in demand from private investors.
Inflows have grown by more than 100% in the first eight months of 2019, compared to the same period last year.
In total, inflows into these funds amounted to around €7.3bn (£6.3bn) between January and August 2019, versus around €3.5bn in the same period of 2018, according to BVI.
This is also significantly higher than in previous years: inflows had amounted to €4.1bn in the first eight months of 2017 and €3.9bn in the same period of 2016.
Despite there being various new providers of open-ended mutual property funds, 92% of the fresh money – around €6.7bn – went to the four major providers. Union Investment claimed the biggest amount at €2.1bn, followed by Deka Group with €1.7bn.
Michael Schneider, managing director of fund manager Intreal, said: “These very high inflows show that there is currently too much money for too few products. Demand from private investors is set to keep on rising given the threat of negative interest rates on private accounts as well.
“However, the established funds and providers are apparently having difficulty in quickly investing such large amounts under their existing fund strategies. As a result, almost all providers have pulled the ripcord and some are now working with restrictive quotas for their funds.”
Schneider added: “Taking the established, conventional sales structures into account, the popularity being enjoyed by new products is very encouraging.”
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