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Spain: Investment funds

A special report prepared by Chemical Bank and The Chase Manhattan Bank NA Background.


After rapid growth of nearly 1000% from 1990 to 1994, the Spanish investment fund industry slowed in 1995 following generally poor market performance in equities, fixed income and currency. Still, the fund industry is a vibrant sector with funds accounting for 17% of GDP compared to 1.7% in 1990. Today there are over three million unit holders.

Regulations allowing investment funds in Spain date back to 1958. Although updated in 1994, the sector remained fairly undeveloped. The relative disinterest in collective investment was finally overcome with the introduction of a more favourable tax regime. Since 1991, in order to cater for its own deposit holders interested in funds, the banking community has promoted the benefits of this tax regime.

Consequently the amount of funds under management grew very rapidly, from Pta3.6 trillion in 1991 to Pta6.3 trillion in 1992, Pta10.2 trillion in 1993, Pta11.2 trillion in 1994 and Pta12.18 trillion by year end 1995. The increase from 1994 to 1995 was less dramatic at 8.45%. Indeed, if fund income is excluded, net growth actually decreased. The first few months of 1996, however, look very promising according to initial figures from the industry.