Asset Flows
UK AUM Still Dominated by Institutions Retail Investors Figures released by the European Fund and Asset Management Association this week confirmed that the European fund industry gained strength during 2010, albeit at a marginally slower pace than in the previous year. Assets under management rose 11% year-on-year to EUR 13.8 trillion at the end of 2010, having grown at an annual pace of 13.7% in 2009 to EUR 12.4 trillion. The UK, France and Germany continue to dominate the asset management industry in Europe, with the three collectively accounting for just under two-thirds (65%) of total assets under management in Europe.
The split of institutional money versus retail money varies across countries but as a whole 68% of assets come from institutional clients and 32% from retail. However, the UK’s level of retail investor engagement appears to still be underperforming that of some Continental peers, with institutional clients making up 77% of the country’s assets under management versus just 51% in Italy and 62% in Germany. Are you a UK-based retail investor? We’ve got tools and tips to help get you on the road to a successful financial future.
Industry News
Brewin Dolphin Snaps Up Irish Fund House
UK wealth manager Brewin Dolphin announced this week that it is to buy Tilman Asset Management for up to £31.5 million, consisting of an initial payment of £18.3 million and a performance-related additional amount of £13.2 million in December 2014. The purchase of the Irish fund house will add more than £800 million to Brewin Dolphin’s assets under management, pushing the UK group’s total AUM closer to £26 billion.
Fund Launches
Looking to Asia for Fixed Income, Part I
AllianceBernstein has launched a new fund, the RMB Income Plus Portfolio, which aims to tap into Chinese growth prospects and other Asian bond investment excluding Japan. The UCITs-compliant fund will invest in renminbi bonds both within and outside China and will aim to remain almost exclusively exposed to the Chinese currency. The fund is managed by Hayden Briscoe, who said the portfolio can also rotate into the offshore renminbi new-issue market if yields become more attractive.
Looking to Asia for Fixed Income, Part II
Allianz Global Investors is to launch the Allianz RCM Renminbi Fixed Income fund in mid-June, subject to FSA approval. The fund will seek long term capital growth in renminbi terms and targets a total return, inclusive of currency appreciation, in excess of 5% per annum over the longer–term. It will invest primarily in RMB deposits and a diversified portfolio of investment instruments including RMB government bonds, RMB corporate bonds, RMB quasi-government bonds, RMB supranational bonds, RMB deposits, RMB certificates of deposit. It may also invest in convertible bonds to enhance the yield. AGI Managing Director Nick Smith said the fund comes in response to European demand and the firm anticipates “considerable interest from investors across Europe in this fund.”
Looking to Asia for Fixed Income, Part III
Schroders is preparing to launch the Schroder Asian Asset Income Fund towards the end of the month. The fund’s objective is to maximise yield and seek long-term capital growth by investing primarily in Asian high yield credits, Asian high yielding equities and other asset classes such as commodities and property securities. The fund, which is to be available in HKD and USD classes, targets a 6% per annum monthly payout. It will carry a management fee of 1.25% per annum and an initial charge of up to 5% on the gross investment amount.
Fund Closures
JOHCM to Close Too-Small Fund
JO Hambro Capital Management is to wind up its US Opportunities fund, managed by Gordon Elvey, at the end of the month as its small size is making it unprofitable to run. JOHCM US Opportunities Retail GBP has returned 3-years annualised trailing returns of 5.73%, according to Morningstar data, but has suffered year-to-date and slipped 5.5% as at June 1, although it has still outperformed both the US Large-Cap Growth Equity category and its benchmark index.
Elvey’s colleague, fund manager Clive Beagles, spoke at the recent Morningstar Investment Conference about the danger of impaired fund performance by those funds that are allowed to get ‘too big’. In an interview with Morningstar following the event, Beagles conceded that too-small funds can also become unprofitable to manage. Watch the interview here: Beagles: Some Funds in Danger of Being Too Big.
Manager Moves
OBSR Removes Fidelity Funds Switzerland
Following the announcement that Jonathan Ogier, manager of the Fidelity Funds Switzerland fund, will depart Fidelity in August 2011, analysts at OBSR, a Morningstar company, have removed the fund’s OBSR A Rating and withdrawn it from the OBSR Global Ratings Service. Alberto Chiandetti will assume responsibility for the fund from August 1 and until then, Chiandetti, who also manages the Fidelity Funds Italy fund, will work closely alongside Ogier to ensure a steady and smooth transition.
