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1H/2010: $500 BILLION IN NET FLOWS TO MUTUAL FUNDS WORLDWIDE; TEMPLETON SURPASSES BLACKROCK AND CARMIGNAC
NEW YORK, NY – July 22, 2010 ---
Despite a challenging second quarter, net flows to long-term mutual funds worldwide in the first half of 2010 reached $500 billion, twice as much as in 1H/2009, according to Strategic Insight (SI), a business intelligence provider to the fund industry, as institutional investors redeemed $625 billion from money market funds.
“Year-to-date, bond funds continued to be the main driver of flows, adding a net $315 billion, followed by equity/mixed funds with a combined net intake of $120 billion; ‘other’ funds, mostly alternative ‘Newcits’ and absolute return funds, collected almost $50 billion in cash flows, a sign of continued convergence between the traditional and alternative fund space,” noted Daniel Enskat, Senior Managing Director and Head of Global Consulting at SI.
Global Mutual Fund 1H/2010 Total Net Flows |
US$ Billion |
|
Equity |
Mixed |
Bond |
Other |
Subtotal
L-T |
Money Market |
Total |
Asia |
6 |
-4 |
52 |
6 |
60 |
-10 |
49 |
Local Europe |
-2 |
23 |
16 |
26 |
63 |
-86 |
-23 |
Int'l/Cross-border |
22 |
19 |
90 |
16 |
147 |
-26 |
121 |
US |
57 |
0 |
159 |
- |
217 |
-502 |
-284 |
Total |
84 |
38 |
317 |
47 |
486 |
-624 |
-138 |
| |
Note:US data excludes variable annuities;
June flow data for non-US funds estimated, assuming similar growth patterns as US funds |
Source: Strategic Insight Simfund MF,GL |
Among the key product innovation and distribution trends of the first half:
- The Fantastic Four – Global Fixed Income, Emerging Market, Asia-Pac and Absolute Return: Top cash flow categories include global fixed income, Emerging Market and Asia Pacific bonds and equities, alongside innovative alternatives and absolute return.
- Billionaires’ Fund Club - $150 billion to 30 products: The top ten existing products in the US, Europe and Asia combined accounted for $150 billion in cash flows year-to-date, with another $30 billion in cash to the most successful fund launches.
- Templeton on Top: Franklin Templeton surpassed Blackrock to become the best selling cross-border long-term fund manager in the first half of the year, followed by Carmignac, Pictet, Allianz and Schroders.
- Profitability variance – not all flows are created equal: Significantly different management fees for multi-billion dollar flagship funds resulted in a different profitability picture for top fund flow managers.
- Main Street/Wall Street Rapprochement: The challenges of the second quarter could provide an opportunity for investment managers to cautiously reengage with and move investors from fixed income to selected equity themes in the second half of the year.
“SI fund flow data from around the world shows that over half of the top selling funds in the first half of 2010 were ‘bridge products’, moving investors from a thematic story to a long-term investment solution in dollar-cost-averaging buy-and-hold fashion”, Enskat said, “with a growing concentration of flows to fewer managers and products, as distributors are restructuring their fund selection criteria post-crisis towards greater partnerships with selected firms”.
For further information please contact:
Jag Alexeyev on +1 212 944 4456 or jag@sionline.com
About Strategic Insight
Strategic Insight is a leading research firm for the fund and wealth management industry, providing clients with in-depth industry data, research reports, and bespoke executive consulting services for product, distribution and business strategy decisions. Strategic Insight assists over 250 firms worldwide, and its Simfund databases and analytical platforms cover more than 70,000 funds, and many more share classes, around the world. SI’s parent, Asset International, is an information provider to financial-services institutions, including asset managers, global pensions, and others. Find out more at www.AssetInternational.com.
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