Despite the climate of mistrust that prevailed over the summer as to those vehicles exposed to securitisation and the credit market (money market dynamic, absolute return and alternative funds), and a turbulent equities market in the second half, assets under management remained relatively stable compared with the end of 2006. Money market funds accounted for 40% of assets under management and equity funds for 27%.

If 2006 was a record year for new money with over €75.3bn in net subscriptions, 2007 will be essentially be remembered for the number of mutual fund share repurchases. Top of the list were high-risk products such as the Money market dynamic, Absolute Return and certain Equity theme-based funds, but also low-risk Bond vehicles. French mutual fund share repurchases stood at €44.6bn for the year.

More particularly, 2007 can be split into two very distinct periods. As in previous years, the first six months attracted nearly €55.6bn across all asset classes and, although net subscriptions remained strong over July (€9.6bn), August marked the turning point in the year in the wake of the US sub-prime mortgage crisis. From that point on, the spread of this crisis to all markets and its potential repercussions on the real economy seriously impeded operator visibility, with French collective fund managers recording a brutal €109.9bn in mutual fund share repurchases during the last five months of 2007.

Over the year as a whole, only the Alternative investment funds and Guaranteed or Formula vehicles were able to post new money of €4.4bn and €1.3bn respectively. While the former confirmed institutional investor appetite for management strategies that are decorrelated from the markets, the second, albeit at a slower pace, continued to attract individual investors.

A study of the allocation of investments over 2007 shows the popularity of Equity vehicles which target international growth and, more particularly, emerging countries. New money into these vehicles totalled €3.5bn, essentially those managed by specialist asset management companies. By allocating €1.6bn to Euro zone Diversified unit trusts and investment funds, investors mostly privileged those management vehicles least exposed to equity risk.

The €-23.6bn year-on-year change in assets under management is the result of three phenomena:

Added to this is the variable which factors in any mergers and, more generally, any changes to the basis for calculation (other effects). As such, the change in assets under management in 2007 is the result of the €-44.6bn net drop in subscriptions, a market effect of €26.9bn, an income effect of €-2.6bn and other effects triggering a drop of €-3.3bn.

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