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Luxembourg assets fall nearly one third

Date: Thursday, April 9, 2009
Author: ICFA

Assets domiciled in the Grand Duchy may have fallen in 2008 but the number of funds is up.

Luxembourg-domiciled fund assets fell by nearly 30% to $2,152 billion by the end of 2008, down from $3,024 billion in 2007, according to Lipper the fund research and analysis organisation.

Ed Moisson, director of fiduciary operations at Lipper, said: "Half of the decline in fund assets took place in September and October, highlighting that the financial crisis was the key factor affecting the industry. Around 80% of the overall asset fall was due to market performance, rather than investor withdrawals, which provides some hope that as the markets recover, so too will the Grand Duchy's fund assets."

However, the number of funds was up nearly 10% to from 10,971 to 12,102 over the year, which Lipper said highlights that there is still sustained interest in Luxembourg as a jurisdiction, even during such turbulence in the financial markets.

JP Morgan Bank Luxembourg maintained its position as the largest fund administrator and custodian with $300.7 billion and $349.1 billion of assets under administration respectively.

Other key figures include:

Specialised Investment Funds (SIFs) contributed $179.6 billion in 1,712 funds. This total is slightly down on last year's total (US$ 205.4bn), but still considerably up on that for funds under the previous law ($104.7 billion in 2006).

The diversified range of asset classes in Luxembourg has ensured that there have been some resilient areas. For example, money market funds rose by 16% (to $561.9 billion) and ETFs rose by 59% (to $32.0 billion).