In 2021, net assets of Luxembourg investment funds reached an all-time high of €5.9 trillion. This represents a year-on-year increase of €886 billion or 17.8 percent.

Retail and institutional investors poured a record amount of money into nearly all asset classes. With net inflows of €394 billion over the past 12 months, and €491 billion stemming from market valuation, the organic growth rate resulting from net subscriptions amounted to 7.9 percent whereas the impact of markets accounted for 9.9 percent of the increase in assets.

Looking back over the past four years, with more than €30 billion net subscriptions per month, investors committed more money than ever to Luxembourg investment funds in 2021.

With a growth of 29.9 percent, private equity is the fastest growing asset class, followed by equity and funds of funds with an increase of 29.8 percent and 25 percent in assets.

Whilst asset managers are continuously enhancing their fund ranges, they are also keen to rationalise the number of funds on offer, as seen by the overall decrease in the number of funds and sub-funds from 14,590 to 14,445 as of 31 December 2021. Combined with an increase of assets, the average size per fund or sub-fund continued to go up from €341 million to €406 million.

Camille Thommes, director general of ALFI, said: “With €5.9 trillion assets under management, Luxembourg investment funds have reached an unprecedented high in a short period of time since the downturn in value caused by the pandemic crisis in March 2020. More importantly, the high amount of net subscriptions month after month is a testimony of the success of investment funds as the optimal investment product for retail and institutional investors alike.

 “The Luxembourg asset management and fund industry is ready to meet the challenges which lie ahead of us. Our society has reached a point of no return in the need to move towards a sustainable business model and asset managers must accompany that transition. The Covid-19 pandemic has been an accelerator in the pace at which new technologies are being deployed. Reaching out to investors digitally has become the new normal.”