EFAMA, the European Fund and Asset Management Association, recently published its annual "Fact Book," which includes a wealth of statistics on European-domiciled funds and a section on European money market funds. The press release titled, "2025 sets new record for UCITS net sales and retail fund purchases," tells us, "EFAMA ... published its 2026 industry Fact Book. This year's edition includes an in-depth analysis of trends in the European investment fund industry, with a special emphasis on what happened last year. It also contains a series of info boxes addressing important regulatory topics that EFAMA is actively working on, including the MISP, retail investment, AML, pensions, the Digital Omnibus, and more." See the full EFAMA 2026 Fact Book here. (Note: Thanks to those who attended our Money Fund Symposium this week in Jersey City! We hope you had a great show! Attendees and Crane Data Subscribers may access the MFS Conference Materials here. Note too: Please join us for our European Money Fund Symposium, which is Sept. 24-25, 2026 in Paris, France.)
EFAMA Director General Tanguy van de Werve comments, "This latest edition of the EFAMA Fact Book highlights several positive developments for the European fund industry in 2025: record UCITS net sales, all-time high fund purchases by EU retail investors, and a renewed allocation to European equities in fund portfolios. It illustrates how asset managers are helping to accomplish some of the Savings and Investment Union (SIU) objectives, namely mobilising household savings, financing the real economy, and strengthening the EU’s position as a global investment hub."
The section on "Money Market Fund UCITS," explains, “Net assets of money market funds (MMFs) reached EUR 2.1 trillion at the end of 2025, up from EUR 2.0 trillion in 2024. Net sales totalled EUR 145 billion—below the record EUR 227 billion seen in 2024, but still well above the decade average of EUR 102 billion. The surge in 2024 was largely driven by an inverted yield curve, where higher short-term rates boosted returns for short duration products such as MMFs. Although yield curves normalised in 2024 and steepened in 2025, sustained strong inflows suggest that some investors increasingly used MMFs as a ‘safe-haven’ cash alternative, adopting a cautious stance amid ongoing geopolitical uncertainty.”
It continues, "Net asset growth of MMFs amounted to only 3% in 2025.... The number of MMFs declined sharply over the past decade. 2019 saw a particularly strong drop of about 160 MMFs as the EU MMFR (Money Market Fund Regulation) came into effect; a number of asset managers chose to close down their MMFs or, more often, transform them into (ultra) short-term bond funds. This applied particularly to small MMFs, often in smaller domiciles, where the extra costs of complying with the MMFR were considered too high. The average fund size of an MMF was about EUR 4 bn at the end of 2025, up from about 1.5 bn ten years earlier. MMF average fund sizes are significantly larger than those of long-term funds, as MMFs, with their low-risk profile and high liquidity, are ideally placed to take full advantage of economies of scale."
EFAMA writes, "The average annual costs of MMFs increased from 10 basis points in 2021 to 18 basis points in 2023, only to remain fairly stable in recent years. These rising costs in recent years may be attributable to exchange rate fluctuations. Despite these slight increases, ongoing charges of MMFs remain very low in comparison to most long-term funds.... The average annual net performance of MMF UCITS was negative in 2025 (-2.5%), a stark contrast to the exceptionally high return in 2024 (7.8%). The reason for these negative net returns was the strong depreciation of the dollar against the euro in 2025 and the fact that a sizable portion of the short term securities European MMFs invest in are denominated in dollars."
Their Fact Book continues, "The MMF market is highly concentrated in three key domiciles. Ireland accounts for the largest share of MMF UCITS net assets at 43%, followed by Luxembourg with 30% and France with 20%. Together, these three domiciles represented 93% of the European total at the end of 2025."
It says, "The EU MMFR ('Money Market Fund Regulation') was adopted in 2016 and came into full effect in January 2019. The MMFR distinguishes between three main categories of MMFs: Public Debt Constant Asset Value (PDCNAV) MMFs; Low Volatility Net Asset Value (LVNAV) MMFs; and, Variable Net Asset Value (VNAV) MMFs. These categories aside, the MMFR also distinguishes between Short-term and Standard MMFs. Short-term MMFs must adhere to tighter investment rules than Standard MMFs. All three types can be categorised as Short-term MMFs; Public Debt CNAV, LVNAV and Short term VNAV. Standard MMFs must be variably priced. Thus only VNAV can be Standard MMFs."
EFAMA explains, "PDCNAV and LVNAV MMFs use amortised cost accounting -- provided certain conditions are met -- to value all their assets and to maintain a net asset value (NAV) or value of a share of the fund, at EUR1/GBP1/USD1. Public Debt CNAV MMFs must invest a minimum of 99.5% of their assets in government debt, repo collateralised by government debt or cash. Units/shares in an LVNAV MMF can invest in a broader range of assets, including commercial paper (CP) or certificates of deposit (CDs) and can be purchased or redeemed at a constant price, as long as the value of the assets in the fund does not deviate by more than 0.2% from par. Both Public Debt CNAV and LVNAV can only be short-term MMFs. VNAV MMFs refer to funds that use mark-to-market accounting to value some of their assets. They can invest in a range of eligible assets, including government debt, CP or CDs. The NAV of these funds will vary with the changing value of the assets and, in the case of an accumulating fund, by the level of income received. VNAV can be either short-term or standard MMFs."
Discussing "Asset allocation -- Currency Breakdown," they write, "MMFs net assets can be broken down by base currency. Collectively, three primary base currencies accounted for 99.5% of UCITS net assets at end 2025. The EUR held the predominant position with 44.8% of net assets, followed by the USD at 36.5% and the GBP at 18.3%. The proportion of USD MMFs declined by 0.8 percentage points in 2025, whereas that of EUR MMFs rose by 0.7 percentage points. The share of GBP MMFs also increased by about 0.2 percentage points. Unlike shifts in recent years, the 2025 changes were less driven by net sales and almost entirely by the depreciation of the dollar versus the euro and the pound."
EFAMA says, “In 2025, investors demonstrated a strong preference for short term USD MMFs (EUR 80 bn). Short-term EUR and GBP MMFs also saw net inflows, albeit somewhat lower (EUR 25 bn and EUR 32 bn, respectively). Net inflows into short-term EUR MMFs decreased compared to 2024. As in previous years, short-term MMFs represented the bulk of total MMF sales.... Standard EUR MMFs attracted EUR 17 bn in net new money in 2025. These standard EUR VNAV MMFs are predominantly used in France, where they serve as a key cash management tool for many French corporations. Standard USD MMFs saw net inflows of EUR 13 bn, whereas inflows into standard GBP MMFs were flat."
On "Asset Allocation," the piece tells us, "At end 2025, an overview of MMFs holdings by geographical region shows that 41% of the short-term paper held by UCITS MMFs was issued in Europe. The US accounted for 30%, with Asia-Pacific region 13%. Another 16% was issued in other countries, predominantly Canada and Australia.... US issuers of short-term paper accounted for the largest share of MMF assets at 30%. This was followed by short-term securities issued in Canada and France (14%, respectively). Australia took fourth place (10%), and the UK (5%) complete the top five."
Finally, EFAMA comments, "European MMFs have experienced significant shifts in the maturity composition of their asset holdings over the past decade. Given that most MMF fixed-income investments usually have a maturity of less than one year, the maturity breakdown can change entirely from one year to the next. By end 2025, just under 40% of MMF fixed-income assets had maturities of between three and six months, while a slightly smaller proportion fell within the six-to twelve-month range. Over the past decade, the share of bonds with maturities exceeding one year has generally declined, although it did increase again in 2025. Conversely, the proportion of fixed-income holdings maturing in under three months has grown recently, rising from 4.1% in 2023 to 7.9% in 2024 to 8.7% in 2025."
