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Cayman Charts Fund Sector Growth In 2016

by Mike Godfrey, Lowtax.net, Washington
04 January, 2018

The Cayman Islands' financial services regulator, the Cayman Islands Monetary Authority, has released a statistical "digest" of the islands' funds industry for 2016.

The digest, released on December 29, 2017, based on filings from regulated entities, shows that, at the end of 2016, there were 10,586 funds registered/licensed under the Mutual Funds Law (2015 Revision), 354 fewer than in 2015. This represents a decline of 3.2 percent compared to 2015. Master Funds were the only subcategory of funds to report an increase in 2016.

More positive was an increase in total and net assets under fund management, which rose by USD435bn and USD17bn, respectively. There was an increase of 67 percent in fund net income, with the best performance reflected in registered funds and master funds.

Performance fees decreased by 26 percent in 2016, which the Authority says reflects the power of consumers to select funds best suiting their needs and save on expenses paid to investment managers.

There was a net capital outflow during the year, as redemptions exceeded subscriptions by USD86bn. The Authority says investors shed risky assets amid continued global growth fears and falling commodity prices. However, this unease was offset by strong labor market data and an increase in interest rates, which helped calm concerns about the US economic recovery leading most assets to rebound from 2016.

The management and administration of funds in 2016 continued to be dominated by the US and the Cayman Islands, respectively. Investment managers in the US managed 70 percent or 5,182 funds with a net asset value of USD2.526tn, with Delaware firms managing 2,067 (2015: 1,842) funds with a total net asset value of USD1.098tn (2015: USD1.018tn).

The Authority says that going forward its supervision of the sector will continue to evolve in response to changes in technology and investor expectations, and in keeping with international standards. It says its overall aim is to ensure investors and investment managers continue to select the Cayman Islands as their of choice.

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