How Have Markets Responded To The European Central Bank’s Corporate Sector Purchase Programme?

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Los precavidos inversores de renta fija europea podrían estar sacrificando el rendimiento
CC-BY-SA-2.0, FlickrFoto: Gideon Benari. Los precavidos inversores de renta fija europea podrían estar sacrificando el rendimiento

Tom Ross, Co-Manager of the Henderson Horizon Euro Corporate Bond Fund, and Vicky Browne, Fixed Income Analyst, look at the impact of the European Central Bank’s corporate sector purchase programme (CSPP).

What is the CSPP?

The corporate sector purchase programme (or CSPP as it is commonly known) was established by the European Central Bank (ECB) and began purchasing bonds on 8 June 2016. The CSPP is a form of monetary policy, which aims to help inflation rates return to levels below, but close to, 2% in the medium term and improve the financing conditions of economies within the Eurozone.

Purchases can be made in both the primary and secondary market. By the end of July 2016 – eight weeks into the programme – secondary market purchases formed 94% of purchases with only 6% being made in the primary market according to data from the ECB.

Which bonds are eligible for purchase?

Bonds purchasable under the scheme must be investment-grade euro-denominated bonds issued by non-bank corporations established (or incorporated) in the euro area. In assessing the eligibility of an issuer, the ECB will consider where the issuer is established rather than the ultimate parent. Thus an issuer incorporated in the Euro area, but whose ultimate parent company is not established in the Euro area, such as Unilever, is deemed eligible for purchase.

How have markets responded to CSPP so far?

To date the ECB has bought 478 bonds totalling approximately €11.85bn from 165 issuers (UniCredit as of 27 July 2016). The list of these bonds (but not the quantities purchased) is available on the websites of the national central banks performing the buying. Analysing these holdings would suggest that, on an industry sector basis, considerable CSPP purchasing has occurred in utilities and consumer non-cyclicals.

In June non-financial credit spreads initially responded positively to the CSPP purchases. However, excess credit returns over the month (returns over equivalent government bonds) detracted from total returns as market volatility increased as a result of the UK voting to leave the EU. Concerns surrounding the vote led to a temporary pull-back in demand for credit and this negative headwind overpowered the positive technical effect from CSPP.

July proved to be a stronger month for credit market performance. The European investment grade market – as measured by the BofA Merrill Lynch Euro Corporate Index – delivered a total return of +1.68% in July in euro terms and excess credit returns of +1.61% (source: Bloomberg at 31 July 2016). Undoubtedly, these positive movements have been partly driven by CSPP purchases as illustrated by the graph below. It reveals how spread performance – a declining spread indicates stronger returns – of the iBoxx Euro Corporate Index has been more pronounced in eligible bonds than non-eligible or senior bank assets.

However July’s returns are not just attributable to the technical support provided by the CSPP. An improvement in market sentiment driven by reduced fears about Brexit, together with a rise in flows into bond funds, has helped to increase demand for the asset class at a time when there is a lack of European investment grade supply.

How has the fund benefited from CSPP?

The Henderson Horizon Euro Corporate Bond Fund was positioned long credit and duration risk versus the index throughout June. Although the fund still trades with a long beta bias we have lowered risk levels over the past few weeks by reducing exposure to positions that have benefited from the recent rally in credit markets. Examples of these are euro-denominated bonds from utility companies Centrica and Redexis Gas, and US real estate investment trust WP Carey.

In July, the fund added to positions from CSPP-eligible issuers on a name-specific basis such as Aroundtown Property, Telenor and RELX Group. Exposure has not just been increased in CSPP-eligible issues but also in companies we favour that are not incorporated in the euro area, such as US names AT&T (in EUR) and Comcast and CVS Health (in USD). The CSPP technical has also been apparent in the primary market. The fund benefited in July from participating in a euro- denominated new issue from Deutsche Bahn, which has performed strongly post issuance. Positive fund performance has also come from a new issue from Teva Pharmaceuticals, which has seen solid demand since coming to the market.

While CSPP should help to provide technical support to European investment grade corporates, there exist several uncertainties in the market – such as the October referendum in Italy and instability in commodity prices – that could cause weakness to arise. We therefore continue to look to reduce risk into further strength while seeking to take advantage of any attractive opportunities presented by volatility or weakness.

 

Michel Rittenberg, in Charge of Wunderlich Miami

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Michel Rittenberg se incorpora a Wunderlich como branch manager para Miami
CC-BY-SA-2.0, FlickrMichel Rittenberg . Michel Rittenberg, in Charge of Wunderlich Miami

Wunderlich, a leading full-service investment firm headquartered in Memphis, recently announced that Michel Rittenberg has joined its wealth management team as manager of the firm’s Miami branch. Rittenberg, a 36-year veteran of the financial services industry, was previously with Raymond James & Associates

“Michel is a well-respected industry professional who will expand our presence in Miami and Coral Gables,” said Jim Parrish, president of Wunderlich’s Wealth Management division. “Having previously been colleagues at Morgan Keegan & Co. for many years, I know that his positive management style and ability to help elevate advisors’ careers will be a tremendous asset to Wunderlich. I’m thrilled to have him join our team.”

Prior to Raymond James, Rittenberg was a branch manager for Morgan Keegan & Co. in Miami from 2005 to 2012. Before that, he was New York City complex manager for H&R Block Financial Advisor and a managing director for Prudential Global Derivatives in New York. He began his career at Merrill Lynch. Rittenberg is a graduate of Beloit (Wisconsin) College and received his MBA from the Thunderbird School of Global Management at Arizona State University.

“Wunderlich is an impressive firm with a bright future, and I’ll be working with a group of true professionals in the Miami branch,” said Rittenberg, who will oversee the branch that was once part of Dominick & Dominick before being acquired by Wunderlich in 2015. “I am proud and happy to be here and look forward to growing our presence in the greater Miami area in the months ahead.”

Lombard Odier Expands Fund Distribution Through a Platform Partnership

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Lombard Odier Expands Fund Distribution Through a Platform Partnership
CC-BY-SA-2.0, FlickrFoto: RonKikuchi, Flickr, Creative Commons. Lombard Odier expande sus capacidades de distribución a través de un acuerdo con Novia

Lombard Odier Investment Management continues to develop its distribution capabilities by making some of its mutual funds available through the Novia Financial and Novia Global Platforms for the first time.

The 17 Lombard Odier IM funds available through Novia Global include some of the group’s most well-known strategies, such as the Convertible Bond fund and Golden Age fund, which invests in equities globally that are expected to benefit as populations grow older.

The inclusion of the 17 funds, many of which are already available on Hargreaves Lansdown’s and Cofunds investment platforms, further builds the group’s distribution footprint.

Novia Global is a multi-currency wealth management service which was launched to the market in October 2015. The platform is available to advisers dealing in the international market, private banks, trust companies and their clients as well as certain other professional investors. Supporting residents (individuals and trusts) based in the Channel Islands, Isle of Man, Switzerland and Europe, Novia Global recently announced the extension of jurisdictions.

“We want to make our diverse range of differentiated funds more readily available to advisers and their clients, and our latest partnership with Novia Group is a reflection of this aim,” said Dominick Peasley, head of Third Party Distribution at Lombard Odier IM.

“We are thrilled to be continually adding to the burgeoning selection of assets on the Global platform and we now offer over 1500 funds on the platform from 67 fund managers and we recently announced the launch of a new DFM service,” said Dave Field, head of Customer Service at Novia Global.

What are the Key Dates for Investors During the Rest of 2016

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Qué esperar del último trimestre del año en los mercados
CC-BY-SA-2.0, FlickrFoto: Dafne Cholet. Qué esperar del último trimestre del año en los mercados

The summer, while investors turned their attention to the Democratic National Convention in Philadelphia, the Republican National Convention in Cleveland, the Olympics in Brazil trading has been light.

But what can be expected for the rest of the year? According to Edward J. Perkin, Chief Equity Investment Officer at Eaton Vance Management, “the second half of the year is chock full of likely market catalysts, including potential Brexit fallout, the upcoming presidential election, Fed meetings and more. Against this uncertain backdrop, we continue to believe that equity investors should remain focused and opportunistic.”

For the specialist these are the dates to keep in mind:

September

September is likely to be a busy month. Post-Labor Day is when many voters will begin to pay close attention to the presidential election. Having skipped August, the Fed will meet again on September 21 to make a decision on rates.

There are also a large number of industry conferences, where company management teams will give updates on their businesses. One of these, the “Back to School” conference, held each year in Boston, involves the largest consumer companies.

September is also important in that it is the third month of the quarter. Many companies have “blackout” periods in the final weeks of each quarter and into the early part of the next quarter, when they report earnings. During these blackout periods, companies suspend their share buyback programs in order to avoid accusations of trading on material, nonpublic information. Given how important corporate buybacks have become to the market, this temporary removal of demand for equities has coincided with several of the market’s pullbacks in the past two years.

October

Like July, October is a busy month for corporate earnings releases. With three quarters of the year complete, companies and investors will begin to think about 2017 and the trajectory of earnings into the approaching year. We will likely have a presidential debate in October, perhaps the only debate of this cycle. Television ratings may well set records.

November 8 – Election Day

At the November 2 Fed meeting, Janet Yellen and her colleagues are likely to take no action in order to avoid roiling markets six days prior to Election Day. We expect the market to be focused on the election throughout the summer and into autumn. If the likely result appears clear, Election Day may not produce much of a market reaction. Regardless of who wins the presidency, the equity market may prefer to see the same party capture the House of Representatives and the Senate. The reasoning would be that a new president will be more effective if he/she has the support of Congress.

Under either party, increased fiscal stimulus in 2017 seems likely. This could include corporate tax reform (lowering rates, reducing deductions and encouraging companies to repatriate overseas cash) and an infrastructure spending bill. If modest regulatory relief is also part of the agenda, then the economic outlook for 2017 may be stronger than many currently believe.

November 30 – OPEC meeting in Vienna

OPEC typically meets twice a year, with its next meeting to be held six days after Thanksgiving. At its November 2014 meeting, OPEC surprised global oil markets by maintaining an elevated level of production, which exacerbated the already-falling price of crude. “We expect supply and demand to continue to rebalance between now and the end of 2016. A production cut at the November meeting would be supportive of oil prices, but is unlikely, in our view.” He notes.

December 14 – Final Fed meeting of 2016

In December 2015, the Fed raised the federal funds rate by 0.25%, which led, in part, to market volatility in early 2016. The expectation at the beginning of 2016 was that the Fed had embarked on a path to normalize the level of interest rates. In the first half of the year, however, the Fed failed to follow through with further rate increases. The market has begun to doubt the Fed’s will: At around midyear, the implied probability of a rate increase on or before the December 14 meeting stood at less than 11%.

December is also the month when many investors choose to conduct tax loss harvesting, selling losers in their portfolios to take advantage of the tax benefit that comes from booking the loss before the end of the year. This activity sometimes puts further pressure on stocks that have performed poorly earlier in the year.

Stay focused and opportunistic

The second half of 2016 is full of potential catalysts – including not only the specter of further Brexit turmoil, but also Fed meetings, a presidential election, corporate earnings and incoming economic data. There will likely be a few surprises along the way. “In our equity portfolios at Eaton Vance, we are staying focused on the long-term prospects of our holdings and will look to take advantage of any opportunities thrown our way by the uncertainty of these events.” He concludes.

Report Projects 25% Growth in Smart-Beta ETFs

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Report Projects 25% Growth in Smart-Beta ETFs
CC-BY-SA-2.0, FlickrFoto: AdamSelwood, Flickr, Creative Commons. La inversión en ETFs de smart beta crecerá un 25% en los próximos tres años

The amount of assets invested in smart-beta ETFs, which are not based on traditional, market capitalization-weighted indexes, could grow by 25% over the next three years, according to new research from Ignites Distribution Research, a Financial Times service.

“Smart beta” (also known as strategic beta, factor-based indexing and other names) has become one of the hottest concepts in asset management, and especially in ETFs. As of mid-2016, the U.S. market featured over $460 billion in assets invested in more than 600 smart-beta ETFs, according to Morningstar.

Of the 740 financial advisors surveyed by Ignites Distribution Research across broker-dealer and registered investment advisor (RIA) channels, 35% are currently using smart-beta ETFs. “That’s significant, but it’s a notably lower percentage than those using traditional ETFs — which suggests plenty of room to grow”, says the report.

“Our growth expectation is based on the fact that once advisors start using smart-beta ETFs they’re very likely to boost allocations to them. Among the smart-beta ETF users we surveyed, 78% of them plan to increase their overall AUM in smart-beta strategies over the next three years. Of the 78% planning an increase, 14% of advisors are considering increasing their overall AUM in smart-beta ETFs by 11% or more. Extrapolating those dollars to the broader advisor universe suggests more than $100 billion in net new flows to smart-beta ETFs over the next three years even if no new advisors start using them”.

 

However, more advisors are expected to start using smart-beta ETFs. Of the advisors Ignites surveyed who don’t use smart-beta ETFs, 17.5% are considering using them. Meanwhile, 52% of advisors don’t have plans to use smart-beta ETFs but are open to learning more.

Those findings are contained in Ignites Distribution Research’s new report, The Opportunity in Smart-Beta ETFs, which examines not just the potential for smart-beta ETFs but how advisors are using them and how asset managers can best address this burgeoning market.

“The payoff can be big for purveyors of active management because smart-beta ETFs can command significantly higher fees than traditional ETFs. Already a number of fund firms that typically eschew passive products have drawn on their active expertise to enter the smart-beta ETF market,” says Loren Fox, the director of Ignites Distribution Research and a co-author of the report. “As additional firms add to an increasing number of smart-beta ETFs, it becomes more important to understand how advisors are deploying these products and where there are genuine openings in the market.”

One of the key findings of the report is that financial advisors using smart-beta ETFs view the concept — taking a rules-based approach to gain exposure to a single factor, multiple factors, or even a strategy — as somewhere between active and passive management. The report reveals how often advisors use smart-beta ETFs to complement active or passive allocations in portfolios, or to replace active or passive allocations. Ignites Distribution Research found that asset managers aren’t always attuned to advisors’ use of smart-beta ETFs within portfolios, overemphasizing certain aspects of the products.

Ignites Distribution Research surveyed the Financial Times 400 Top Broker-Dealer Advisors, a list of top broker-dealer advisors from across the U.S. managing, on average, $1.7 billion in client assets; the Financial Times 300 Top Registered Investment Advisors, a list of elite, independent RIA firms managing, on average, $2.8 billion in client assets; and midsize financial advisors in the broker-dealer and RIA channels that manage, on average, $300 million in client assets.

Schroders Announces Latest GAIA UCITS Offering with Two Sigma Advisers

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Schroders Announces Latest GAIA UCITS Offering with Two Sigma Advisers
CC-BY-SA-2.0, FlickrFoto: AedoPulltrone, Flickr, Creative Commons. Schroders lanza un nuevo fondo en su plataforma GAIA de la mano de Two Sigma Advisers

Schroders is pleased to announce the launch of an externally-managed fund, Schroder GAIA Two Sigma Diversified, on its UCITS platform. The fund will be sub-advised by Two Sigma Advisers, LP, and launches on 24 August 2016.

The strategy, created by Two Sigma Advisers, LP, in collaboration with Schroders, will combine US equity market-neutral and global macro strategies. The fund aims to offer investors portfolio diversification through a liquid alternative strategy that intends to be uncorrelated to traditional equity and bond markets. The strategy will apply a scientific and algorithmic approach to investing across thousands of individual equities and hundreds of macro markets, allocating the majority of the fund to the equity market-neutral strategy.

Two Sigma Advisers, LP was launched in 2009 and together with its affiliates (“Two Sigma”) has built an innovative platform that combines extraordinary computing power, vast amounts of information, and advanced data science to produce breakthroughs in investment management and related fields. Two Sigma employs more than 1000 people, including more than 150 PhDs.

Geoff Duncombe, Chief Investment Officer of Two Sigma Advisers, LP said: “Two Sigma’s platform approach leverages data and technology expertise to create solutions that meet the needs of diverse investor groups. We are thrilled to partner with Schroders, which has built a preeminent UCITS platform, to bring investors portfolio diversifiers that seek to deliver controlled volatility, low correlation to markets, and attractive risk-adjusted returns.”

Eric Bertrand, Head of Schroders GAIA, said: “We continue to see very strong demand for liquid alternative investment strategies, as clients seek to diversify their portfolios. We’re delighted to partner with Two Sigma to launch this newly created strategy specifically tailored to meet these needs, with the aim of delivering alpha. Two Sigma has a strong reputation in the field due to its leading technology expertise and creative, research-driven approach, which allows the firm to design and evolve intelligent systematic strategies.”

GAIA Platforms

Schroder GAIA and Schroder GAIA II combine the strength of Schroders’ renowned asset management expertise and extensive distribution capability with leading hedge fund managers.

Schroder GAIA Two Sigma Diversified will launch on the Schroder GAIA UCITS platform. Schroders now has nine funds on the two GAIA platforms, eight managed by external hedge fund managers (Schroders GAIA Two Sigma Diversified, Schroder GAIA Egerton Equity, Schroder GAIA Sirios US Equity, Schroder GAIA Paulson Merger Arbitrage, Schroder GAIA BSP Credit, Schroder GAIA BlueTrend, Schroder GAIA Indus PacifiChoice and Schroder GAIA II NGA Turnaround) and one managed internally (Schroder GAIA Cat Bond).

A Secure Retirement is Not Only a Fundamental Need for Mexicans, but Also Their Own Responsibility

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Un retiro digno no solo es una necesidad fundamental de las personas sino cada vez más su propia responsabilidad
CC-BY-SA-2.0, FlickrPhoto: Ken Teegardin. A Secure Retirement is Not Only a Fundamental Need for Mexicans, but Also Their Own Responsibility

Mexicans today seem to be aware of the challenge they face for their future: 89% of them agrees that their own retirement funding is increasingly their own responsibility, according to the conclusions of Natixis Global Asset Management’s Global Retirement Index 2016, with Mexico ranking 35th in a list of 43 countries.

As the responsibility to finance retirement transfers from governments and employers to people, the need to increase contributions to savings becomes imperative. We believe voluntary contribution via the Afore account can be one of the best alternatives. By defining a savings plan for retirement, financial advisors may provide an added value to workers, with clear ideas and information on how to be better prepared for retirement.

“The pension system coverage in Mexico is still a challenge, and achieving security in retirement may still be difficult, although a possible goal if all the stakeholders — policymakers, employers and workers – contribute”, said Mauricio Giordano, Country Manager, Natixis Global Asset Management México, at the 1st National Afore Convention.
According to Giordano, the following 5 principles are a good starting point for a successful retirement plan:

  1. Define the spending needs in retirement: both advisors and workers should honestly assess their spending needs at the time of retiring, keeping in mind priorities such as mortgage or rent, healthcare, family, insurance and taxes. The lifestyle preferences such as travels, clubs and hobbies should also be considered.
  2. Match your retirement funds with your expenses: The key challenges to plan for retirement is how to finance expenses short and long term. Dividing financial commitments in mandatory and optional may help simplify the process to prioritize the spending patterns. The main goal for financial advisors and clients is to continuously and sustainably match funds with spending needs. Resources may include income from investment, social security, pensions and other sources.
  3. Plan for new risks in retirement: The fear to lose money is one of the biggest challenges for workers who save for their pension. This may make investment decisions difficult. Besides considering the traditional risks, retirement plans must consider additional risks such as longevity and inflation.
  4. Minimize fiscal impact: in case an investment portfolio is a main source of cash flow, it is essential to have an effective fiscal strategy. Financial advisors and their clients may resort to a tax professional to ensure an optimum fiscal efficiency.
  5. Commitment and Flexibility: Both for advisors and clients, establishing a plan to fund retirement and financial goals in retirement is a continuous process. It requires flexibility to adapt to changes in the interests and unexpected events such as healthcare issues or long term security. The most effective plans to finance retirement have the capacity to adjust to lifestyle changes.

“Our research shows clear findings: in those countries providing more security to their retirees, the government, employers and specialized investment firms offer incentives and innovative solutions so that workers have the tools they need to save for retirement,” concluded Giordano.

You can read the full report in the following link.

Diego Parrilla joins Old Mutual Global Investors as Managing Director, Commodities

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Old Mutual Global Investors (OMGI), part of Old Mutual Wealth, has announced that Diego Parrilla joined the business on 8 August, in the newly created role of managing director, commodities.

Based in Singapore, Diego will report into Paul Simpson, investment director at OMGI. He will initially be responsible for promoting and building the GBP 60 million Old Mutual Gold & Silver Fund to the institutional investors in Singapore and other markets in which OMGI operates.  He will also be working with OMGI’s management team to identify absolute return strategies across precious metals and commodities that are aligned with the strategic direction of the company, and with client demand and market suitability.

Diego joins the business from Dymon Asia Capital, where he worked from August 2015 having previously held a number of high profile investment and distribution positions during his career, including portfolio manager at BlueCrest Capital Management, from June 2014 to July 2015; managing director and head of commodities, Asia Pacific at Merrill Lynch from 2009 -2011, and managing director and global head of commodity sales at Merrill Lynch from 2005-2009. Prior to this, Diego was an executive director in the commodities division at Goldman Sachs from 2001-2005, and started his career as a precious metals trader at JP Morgan in London in 1998.

He is also a best-selling author having co-written, “The Energy World Is Flat: Opportunities From The End of Peak Oil” in 2015 and “La Madre De Todas Las Batallas in 2014”. He is also a regular contributor to El Mundo and the Financial Times.

“Diego is a highly accomplished and respected investor and commodities economist, and we’re thrilled to welcome him to the team.  At OMGI we recognise that precious metals have become an increasingly important asset class as investors look to hedge against the impact of modern monetary policy. We will call upon Diego’s significant experience and knowledge of commodity markets to assess client demand for alternative commodities products in the future,” commented Richard Buxton, CEO, OMGI.

“We are seeing a perfect storm in the gold markets whereby central banks and global markets are testing the limits of monetary policy, credit markets, and fiat currencies, which in my view support a multi-year bull market for precious metals. The Old Mutual Gold & Silver Fund offers a differentiated proposition. I look forward to working with the entire OMGI team to continue to deliver best in class solutions across precious metals and commodities, key components of global macro markets, for our clients.”, added Diego Parrilla.

The Old Mutual Gold & Silver Fund launched in March 2016 and is managed by Ned Naylor-Leyland. It aims to deliver a total return and utilizes a distinctive investment approach, combining indirect exposure to gold and silver bullion with selected precious metals mining equities

Investors are Less Bearish as Cash Levels Drop Sharply Amidst a Rebound in Global Growth Expectations

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According to the latest BofA Merrill Lynch Fund Manager Survey cash levels dropped sharply, from a 15-year high of 5.8%, to 5.4% in August. At the same time, global growth expectations rebounded, with a net 23% of investors expecting the global economy to improve in the next 12 months.

“Investors are less bearish, but sentiment has yet to shift from ‘fear’ to ‘greed’. As such, we expect stock prices to rise further until bonds throw another tantrum,” said Michael Hartnett, chief investment strategist.

Other findings include:

  • Central banks’ creation of a low and stable rates environment is a big factor driving fresh optimism and a preference among fund managers for deflation assets over inflation assets; only 13% of respondents expect the BoJ or ECB negative interest rate policy to end within the next 12 months
  • A record net 48% of investors think global fiscal policy is currently too restrictive
  • Geopolitics is seen as the largest risk to financial market stability, followed by protectionism – which is cited at the highest level since December 2010
  • EU disintegration, followed by renewed China devaluation and US inflation are seen by investors as the biggest tail risks
  • Allocation to US equities is highest since January 2015 at a net 11% overweight
  • Allocation to Eurozone equities remains low at a net 1% overweight while allocation to UK equities improves to net 21% underweight from net 27% underweight last month
  • Allocation to EM equities improves to net 13% overweight, its highest level since September 2014
  • While allocation to Japanese equities improves to a net 1% underweight from a net 7% underweight last month, allocation preference for the next 12 months worsens to -8% from -3% with only the UK behind Japan

Manish Kabra, European equity quantitative strategist, added that “Eurozone equity allocations are broadly unchanged amid concerns of EU disintegration and UK stocks are still the least-preferred. Within Europe, we prefer UK large-caps from both a positioning and macro perspective, as they benefit from weaker GDP, lower yields and less European exposure.”

AUM in the Global Investment Funds Market Grew US$1.1 Trillion in July

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El mercado global de fondos de inversión creció en 1,1 billones de dólares en el mes de julio
CC-BY-SA-2.0, FlickrPhoto: Jose Gutierrez. AUM in the Global Investment Funds Market Grew US$1.1 Trillion in July

According to the Global Fund Market Statistics Report, written by Otto Christian Kober, Global Head of Methodology at Thomson Reuters Lipper, assets under management in the global collective investment funds market grew US$1.1 trillion (+3.0%) for July and stood at US$37.1 trillion at the end of the month. 

Estimated net inflows accounted for US$107.7 billion, while US$967.3 billion was added because of the positively performing markets. On a year-to-date basis assets increased US$2.1 trillion (+6.1%). Included in the overall year-to-date asset change figure were US$123.9 billion of estimated net inflows. Compared to a year ago, assets increased US$1.1 trillion (+2.9%). Included in the overall one-year asset change figure were US$478.9 billion of estimated net inflows. The average overall return in U.S.-dollar terms was a positive 3.0% at the end of the reporting month, outperforming the 12-month moving average return by 3.0 percentage points and outperforming the 36-month moving average return by 2.9 percentage points.

Fund Market by Asset Type, July

Most of the net new money for July was attracted by bond funds, accounting for US$77.6 billion, followed by money market funds and commodity funds, with US$47.7 billion and US$3.3 billion of net inflows, respectively. Equity funds, with a negative US$19.4 billion, were at the bottom of the table for July, bettered by “other” funds and real estate funds, with US$4.5 billion of net outflows and US$0.3 billion of net inflows, respectively. The best performing funds for the month were equity funds at 4.6%, followed by “other” funds and mixed-asset funds, with 4.3% and 2.5% returns on average. Commodity funds at negative 1.3% bottom-performed, bettered by real estate funds and money market funds, with a positive 0.2% and a positive 0.3%, respectively.

Fund Market by Asset Type, Year to Date

In a year-to-date perspective most of the net new money was attracted by bond funds, accounting for US$279.3 billion, followed by commodity funds and alternatives funds, with US$26.0 billion and US$9.1 billion of net inflows, respectively. Equity funds were at the bottom of the table with a negative US$110.9 billion, bettered by mixed-asset funds and money market funds, with US$51.4 billion and US$38.2 billion of net outflows. The best performing funds year-to-date were commodity funds at 12.1%, followed by mixed-asset funds and bond funds, both with 7.2% returns on average. Alternatives funds, with a positive 1.3% was the bottom-performing, bettered by money market funds and “other” funds, with a positive 1.9% and a positive 5.1%, respectively.

You can read the report in the following link.