“Fitch Ratings believes that having large, well-established funds is key in the current competitive environment where cross-border fund flows are concentrated among a few players,” analysts Aymeric Poizot and François Vattement wrote in a report issued on Monday.

“Flagship funds help fund managers achieve better distribution of their products, and contribute to portfolio management focus and operational efficiency. UK and US players are far better positioned in this regard than those in mainland Europe.”

The Fitch report evaluated all European funds--aside from money market funds--that are domiciled in Luxembourg or Ireland and sold in two or more countries. The credit ratings agency found that out of 12,000 such cross-border funds, only 430 had more than one billion euro in assets and the average fund size was €210 million. Fitch used figures from fund data firm Lipper.

“Of the top ten players with more than 25 cross-border funds and the highest proportion of flagships (more than one billion euro of assets), all are UK or US based, with the exception of Robeco,” the Dutch asset manager.

The report then noted that: “of the top ten players with the largest ranges and smallest proportion of flagships, all are based in mainland Europe, with the exception of HSBC.”

Fitch said that proliferate fund families were often those run and distributed by retail banking and insurance groups.

The Fitch analysts said that focusing on flagship funds not only reduces operational costs, but allows fund managers to spend less time on administrative tasks and more time running their portfolio.

These advantages mean that “Fitch gives value to the existence of flagships,” when rating fund families.