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Chart 1: Asset Class Flows, Active and Passive, June 2021 (£bn)
Source: Refinitiv Lipper
Generally, the largest flows by asset class are either equity or money market. Occasionally, it’s bonds. It’s hardly ever mixed assets…except when it is, and June was such a month, with the latter taking in £1.83bn. To some extent, this is because net flows elsewhere are so muted, as mixed assets took in about the same as in May, but both bonds and equities slumped.
The real story is the dominance of passive versus active strategies (£1.35bn/-£678m for bonds and £364m/-£79m for equities). Even commodities—generally active territory—saw passives take £109m while active funds lost £96m.
Chart 2: Passive Asset Class Flows, Mutual Funds v ETFs, June 2021 (£bn)
Source: Refinitiv Lipper
While it’s nice when a theme runs through the month’s flows, no such thing is evident in the passive space. As in May, ETFs and passive mutual funds divided up the fixed income cake between them (£591m and £754m, respectively), but equity ETF flows were negative to the tune of £684m while their mutual fund peers netted £1.05bn.
Chart 3: Largest Positive Flows by Refinitiv Lipper Global Classification, June 2021 (£bn)
Source: Refinitiv Lipper
Mixed Asset GBP Aggressive is the largest money gatherer in June, up from second in May, switching places with Money Market GBP.
As seen from Chart 1, bond flows have been strong this month, though it’s unusual to see Alternative Credit Focus lead the fixed income pack, taking in £544m, mainly to ABS-based portfolios—the biggest gainer being Insight Liquid ABS S GBP Acc, which netted £303m.
Equity Global returns to positive flows (£997m), and was first placed from January to April, before dropping into negative territory in May.
Chart 4: Largest Negative Flows by Refinitiv Lipper Global Classification, June 2021 (£bn)
Source: Refinitiv Lipper
The most obvious thing about the above chart is the largest bar—£867m exiting Absolute Return GBP Low. That’s accounted for by one fund.
Thereafter, despite it being a positive month for equities overall, the home market has seen significant outflows, losing £1.47bn across UK small- and mid-cap, equity and equity income combined, with Equity US shedding £402m. Over the 12 months to the end of June, Equity UK has lost £3.9bn, and Equity UK Income is down £7.12bn, although Equity UK Small & Mid has attracted £1.92bn. The latter has been a top-performing classification over the period, but it’s worth noting that the two domestic large cap sectors have also produced decent numbers, despite the negative flows.
Chart 5: ESG Asset Class Flows, June 2021 (£m)
Source: Refinitiv Lipper
Equities have attracted by far the largest share of ESG assets over the month, which is quite typical. What’s also something of a pattern is that this is matched by negative flows from the asset class’ “conventional” funds: £1.6bn versus £1.33bn, respectively.
The top money taker is the Royal London Emerging Markets ESG Leaders Equity Tracker R Acc (£316m), which also had a positive May, despite negative flows for the classification that month.
The domination of Liontrust and Royal London in the sustainable mixed-asset space was interrupted in June by the Amundi Funds Multi-Strategy Growth fund taking £45m, topping the table.
May’s uncharacteristically large flows to ESG money market funds have not been sustained, with “moral money” going negative by £436m.
Chart 6: Largest Positive Flows by Promoter, June 2021 (£bn)
Source: Refinitiv Lipper
Legal & General takes top spot in promoter funds in June (£1.59bn). As indicated by the table below, the bulk of this was in money market funds (£784m), followed by alternatives (£609m).
Morgan Stanley also saw strong flows (£935m), dominated by its money market offerings (£896m).