US Mutual Funds Use Luxembourg As Gateway To Europe, Says Report

by Carla Johnson, Investors Offshore.com

25 April 2002

A report in the Wall Street Journal on Wednesday revealed that US mutual fund companies are increasingly using Luxembourg-based investment funds as a 'gateway to Europe'.

Citing the results of a recent study conducted by London-based fund research company, Fitzrovia International, the WSJ announced that US mutual fund organisations had grabbed market share in Luxembourg-based funds from their European rivals, increasing their assets in the tiny jurisdiction by 69% at the end of last year.

The survey's findings revealed that although Swiss fund companies maintained their lead in terms of Luxembourg-based assets at 25.5% of the market, US companies beat their German counterparts to second place with a share of 22.5% to the German 16.5%.

'Americans have used Luxembourg as a gateway to Europe,' PricewaterhouseCoopers Luxembourg's Investment Management Group Head, Marc Saluzzi, told the WSJ, adding that: 'I remember in the early '90s, when Americans came to Luxembourg, and the Europeans laughed at them. But competitors are not laughing any more.'

Recent reports have suggested that US fund companies have also benefited from a growing preference among European investors for stock funds, as opposed to bond funds. Luxembourg has traditionally been a favoured location for cross-border fund sales because, compared with other European countries, foreigners are required to jump through fewer bureaucratic hoops in order to register and sell funds.

Recommended