Fund supermarkets in Spain 2007

Fund supermarkets in Spain 2007 examines developments in the Spanish fund supermarket sector and assesses the distribution channels that are in operation. The report analyzes both the current and possible future trends of the industry.
Report Highlights

Fund supermarkets exercise considerable control over the fortunes of fund managers through their short-lists of recommended funds. Fund supermarkets in Spain currently offer a comprehensive range of investment funds, covering domestic and international markets. Most recently, Spanish legislation has made provisions for two new fund classes available to retail investors exchange traded funds and funds of hedge funds. Year-on-year growth in AuM fell from 11.94% in 2005 to 1.31% in 2006. This sharp decline in growth is partly attributed to: a growing preference for bank deposits (among conservative investors) triggered largely by the introduction of a new tax regime; and increasing demand for foreign funds (among more sophisticated investors).
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Catalyst 1
Summary 1
EXECUTIVE SUMMARY 2
The fund supermarket sector in Spain continues to develop, with providers expanding their range of products and services for both B2C and B2B markets 2
Spain's bank-dominated mutual funds industry is registering a declining growth rate 2
Recent Spanish legislation supports the development and marketing of collective investments 2
Fund supermarkets are offering an expanded range of services 2
Fund supermarket distribution provides an expansionary forum for smaller fund managers, in particular, and a platform for the supermarkets themselves to explore broader business areas 3
MARKET BACKGROUND 7
Spain's bank-dominated mutual funds industry is registering a declining growth rate 7
The mutual fund industry in Spain is worth EUR321 billion 7
In 2006, growth in mutual funds under management declined as a result of new legislation and shifting investor demand 9
DISTRIBUTION DYNAMICS 10
Spanish banks dominate the mutual fund sector 10
Banks account for more than half of mutual fund distribution, according to two separate sources 10
Fund supermarket clients are young and technologically savvy 12
REGULATION 13
Recent Spanish legislation supports the development and marketing of collective investments 13
Legislation has been aimed at improving the flexibility and efficiency of the collective investments sector, while enhancing investor protection 13
Fund supermarkets can offer access to new fund structures 13
The new law also created new opportunities for fund distribution 14
New regulations on prospectuses are intended to facilitate fund marketing 14
The revised income tax law increased competition from savings deposits 14
New EU legislation (UCITS directive and MiFID) will facilitate market development and enhance consumer protection 14
MiFID allows fund managers and distributors improved flexibility, but also introduces new obligations 15
DISTRIBUTOR PROFILES 16
Fund supermarkets are offering an expanded range of services 16
Tressis offers the broadest selection of mutual funds 16
Pricing and investment stipulations are less competitive than those of other providers 17
Retail investors account for a minority of business 17
Inversis focuses on the intermediary market 17
Inversis maintains pricing parity 18
Just 25% of business is attributed to individual investors 18
Uno-e is a smaller player, marketing to individual investors 18
Pricing is more competitive than some larger platforms, but in line with the general industry trend 19
Uno-e is a retail-based provider 19
FondoTop focuses on investment funds for the retail market 19
Pricing is competitive 19
FondoTop's primary market comprises individual customers 20
Spanish investors pay minimal fees for fund supermarket services 20
DISTRIBUTION STRATEGIES 21
Fund supermarket distribution provides an expansionary forum for smaller fund managers, in particular, and a platform for the supermarkets themselves to explore broader business areas 21
Fund platforms rely on advanced technical capability for efficient processing and the flexibility to respond to market demand for new funds 21
Supermarkets are sustaining their growth by offering access to new fund structures and providing complementary services 21
For retail-focused supermarkets, pricing and branding are key; intermediary-based platforms emphasize operational support 22
Fund supermarkets support fund managers' expansion initiatives; however fund managers also have their part to play 23
Direct distribution and value-added services will shape the future development of the fund supermarket sector 24
APPENDIX 25
Data 25
Definitions 30
Asset manager / Asset management company 30
Bank 30
Collective Investment Scheme 30
Exchange-Traded Fund 30
Fund of funds 30
Fund supermarket 31
Hedge fund 31
Non-retail market 31
Retail market 31
Structured products 31
UCITS 31
Methodology 32
Further reading 32
Ask the analyst 32
Datamonitor consulting 32
Disclaimer 32
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Table 1: Comparative overview of selected Spanish fund supermarkets 16
Table 2: Total mutual funds under management segmented by investor, EURm, 2002-2006 25
Table 3: Retail savings & investment asset balances, EURm, 2002-2006 26
Table 4: Retail mutual funds under management segmented by type of fund, EURm, 2002-2006 27
Table 5: Mutual fund subscriptions segmented by financial group, EURm, 2006 Q1-Q4 28
Table 6: Mutual fund redemptions segmented by financial group, EURm, 2006 Q1-Q4 29
Table 7: Total mutual fund assets segmented by distribution channel, Dec 2006 30



Figure 1: Retail mutual funds represent just over two-thirds of total mutual funds under management 7
Figure 2: Retail mutual funds accounted for 18% of total household savings and investment portfolios in 2006 8
Figure 3: Investors hold roughly one third of their fund assets in balanced funds or bond/money market funds 9
Figure 4: More than 60% of mutual fund subscriptions are channeled through banks 10
Figure 5: Banks and savings banks together account for more than 90% of fund redemptions 11
Figure 6: Fund supermarkets account for a miniscule proportion of fund assets today 12
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