The total net assets of undertakings for collective investment (UCIs) in Luxembourg grew by 1.88% in January 2025 to €5,929.317bn, up from €5,820.088bn in December 2024, the Luxembourg Financial Sector Supervisory Commission (CSSF) in a press release on 27 February 2025. Over the past twelve months, net assets increased by 11.32%.
The Luxembourg UCI industry registered a positive variation of €109.229bn in January. This increase was attributed to positive net capital investments of €9.474bn, equivalent to 0.16%, and favourable financial market developments contributing €99.755bn, or 1.72%.
The total number of undertakings for collective investment stood at 3,128, down from 3,143 in the previous month. Among these, 2,060 entities had an umbrella structure, comprising 12,482 sub-funds, while 1,068 entities followed a traditional UCI structure. This brought the total number of fund units operating in Luxembourg’s financial sector to 13,550.
According to the CSSF, financial markets in January were influenced by several key events. The inauguration of US president Donald Trump both optimism and uncertainty regarding potential policy shifts, particularly concerning tariffs. While the US economy remained strong, signs of disinflation were evident. A major development was the rise of Deepseek, a Chinese artificial intelligence firm challenging US dominance in the sector. This led to significant market reactions, particularly in the technology sector, where Nvidia a historic market capitalisation loss of nearly $600bn in a single day (although its stock price has more or less bounced back since then). Despite this, US equities ended the month positively, supported by gains in other sectors. European equities also recorded substantial growth as investors moved away from technology stocks and economic indicators improved. Latin American equities performed strongly, with notable gains in Colombia and Brazil, further supported by a more than 5% appreciation of the Brazilian real against the euro.
Equity UCI categories experienced mixed capital investment flows in January. The largest inflows were recorded in US and Eastern European equities. Fixed income UCIs saw positive performances across all categories, except for the global money market, which was negatively impacted by the depreciation of the pound sterling against the euro. European bonds benefitted from tightening credit spreads, while US bonds gained from falling yields. Central banks played a significant role in shaping market conditions. The Federal Reserve maintained interest rates and indicated no imminent rate cuts, whereas the European Central Bank by a quarter of a percentage point, in line with expectations.
Fixed income UCIs also recorded positive net capital investments in January, except for the USD money market category. The largest inflows were observed in the global money market and global market bond categories.
During the month, nine new undertakings for collective investment were registered on the official list, while 24 were deregistered.