FMA Report on Asset Management for the 3rd quarter of 2023: Slight fall in net asset value and first ever greenwashing analysis using artificial intelligence-based methods
At the end of the 3rd quarter, a total of around € 205.1 billion in assets[1] was managed in Austrian funds. In comparison with the preceding quarter, there was a slight fall by -1.2 % or € -2.5 billion in net asset value. The growth in the net asset value since the slight of the year however remains positive, at +2.4 % or € +4.9 billion. During the 3rd quarter there were aggregated net outflows of funds of € 0.2 billion. The decreases in net asset value in comparison with the preceding quarter can be observed across almost all investment classes, with the strongest decreases being observed among equity funds (-3.1% or – € 1.2 billion in comparison with the preceding quarter) and real estate funds (-3.2% or – € 0.3 billion). Negative market developments were the main driver for the fall in net asset value in most investment classes. In the area of real estate funds, the decreases are almost exclusively due to net outflows of funds.
FMA uses artificial intelligence methods for identifying greenwashing
Sustainable funds as defined in Articles 8 and 9 of the Eu’s Regulation on sustainability‐related disclosures in the financial services sector[2] make up a considerable proportion of the Austrian funds market, with a share of over 45% of the total net asset value of Austrian funds as of the cut-off point of 30.09.2023. Even though there is currently no explicit regulatory designation for sustainability funds, the name of a fund is nonetheless not allowed to give the impression of sustainable investment, where this is not actually achieved by the actual investment strategy. Should this in fact be the case, then this is called “greenwashing”. "Greenwashing" not only constitutes misleading consumers with regard to the fund’s investment strategy, but is also a breach of relevant disclosure requirements. In order to prevent “greenwashing” from occurring, the FMA therefore conducts targeted supervisory activities for checking disclosures as well as for checking observance with the disclosed investment strategy. To do so, the FMA has for the first time made use of a greenwashing analysis framework for retail funds, which also uses automatic text analysis methods and artificial intelligence. Using natural language processing techniquew (NLP) the extent and content of the sustainability-related language is funds documents is analysed and the messages then compared against the actual sustainability characteristics of the investment assets. In a second step, identified anomalies are subjected to an individual analysis, and then ultimately flow into ongoing supervision or in the scope of on-site inspections as an input.
General information about the Austrian funds landscape
As of 30.09.2023, there were 14 investment fund management companies (KAGs; Kapitalanlagegesellschaften) authorised in Austria under the Investment Fund Act 2011 (InvFG 2011; Investmentfondsgesetz 2011) and 59 alternative investment fund managers (AIFMs) under the Alternative Investment Fund Managers Act (AIFMG). These funds break down into 879 undertakings for collective investment in transferable securities (UCITS) and 1,207 alternative investment funds (AIFs). Categorised by investment strategy they consist of 1,140 mixed funds, 428 bond funds, 357 equity funds, 53 short-term bond funds, 41 private equity funds, 19 real estate funds as well as 48 other funds. Of these, some 621 are classified as sustainability-related funds under the Sustainable Finance Disclosure Regulation (SFDR). The total number of Austrian funds fell in comparison with the preceding quarter by five funds, with the number of Austrian funds having increased by 16 since the start of the year.
The complete “FMA Report on Asset Management for the 3rd Quarter of 2023” can be downloaded from the FMA Website (in German only) under https://www.fma.gv.at/investmentfonds-und-verwaltungsgesellschaften/quartalsberichte/
Journalists may address further enquiries to:
Alexander Gruber
+43/(0)676 88 249 415
+43/(0)1/24959-6002
[1] Aggregated volume of funds as Net Asset Value (NAV)
[2] Also known as the "Sustainable Finance Disclosure Regulation" or SFDR.