Since the outflows of €100.3 bn for the year 2023 marked the highest outflows from mixed-assets funds on record, it is worthwhile to analyze the underlying trends in this segment of the European fund industry, as we may see a new era for mixed-assets funds. Since ETFs play only a very minor role in the segment of mixed-assets funds, we won’t analyze the flows by product type. Graph 1: Estimated Annual Net Flows in Mixed-Assets Funds (Euro Billions) Source: Refinitiv Lipper Mixed-assets funds have been in the focus of European investors since after the credit crisis in 2008. This was

Bond and equity fund correlations have trended up this century   Increasing equity-bond correlations over decades poses questions for traditional portfolio construction. The perceived low correlation between equity and bond returns is the basis of the construction of the “balanced” portfolio. The split between equities and bonds provides diversification benefits that should lead to better risk-adjusted returns over the longer term. Indeed, multi-asset sales (particularly those with a stronger equity tilt) have proven popular over the past three years, despite ongoing volatility and swings in market leadership. A recent study by FTSE Russell has noted that for most of the

Using the Lipper Leaders scoring system to analyse the best-performing funds in the IA Mixed Investment 0-35% Shares sector.   Mixed investment funds offer a (relatively) hassle free way of managing your portfolio asset allocation, with it being done within one fund wrapper. The Investment Association sectors offer four such sectors, each defined by their equity allocation. More equities mean more risk, but the potential for greater return. For example, over the past 20 years Mixed Investment 40-85% Shares has returned an average of 266%, and its 0-35% Shares sibling, 122%. The quid pro quo is that when markets fall,

Markets have shifted dramatically over the past year, with investors still adjusting. Inflation is now at a four-decade high, with the Bank of England in August anticipating a peek of “just over 13% in 2022 Q4… before falling to the 2% target two years ahead”. That 2% is looking a little optimistic.   Low-Risk Bonds Look Risky With all these threats, investors will naturally be looking for safe havens. But what constitutes a haven in this environment? Cash savings won’t so much be eaten up as devoured by inflation. The immediate prospects for bonds don’t look great. While the previous

I think we can agree that it’s been rather an eventful year so far. “Unprecedented” has been an overused phrase in market commentary and, in defence of those of us who make such comments, not without due cause.The FTSE 100 plummeted by more than 8% on 9 March—its biggest fall since 2008. The index bottomed out on 23 March, at below 5,000, having shed more than a third of its value since its recent peaks in mid-January. Over the summer, it’s ground higher to trade broadly between 5,800 and 6,500. March was the turning point. During the depths of the

Last year, as stated in our latest fund market review, was a good year for net flows into mutual funds and the overall development of the assets under management in the European fund industry. As a result, you might expect that fund promoter activity concerning fund launches, liquidations, and mergers would show that the fund industry is in growth mode. However, there was only a slight increase in the number of funds in Europe—many French asset managers closed and merged funds domiciled in France with similar funds which they launched in Luxembourg and/or Ireland to support their cross-border fund sales

December was the twelfth consecutive month showing a positive picture for long-term mutual funds. European fund promoters enjoyed net inflows into mixed-asset funds (+€8.7 bn), followed by bond funds (+€7.6 bn), alternative UCITS funds (+€3.4 bn), equity funds (+€2.4 bn), and real estate funds (+€0.5 bn). Meanwhile commodity funds (-€0.01 bn) and “other” funds (-€0.8 bn) faced net outflows. These fund flows added up to overall net inflows of €21.7 bn into long-term investment funds for December. ETFs contributed €4.7 bn to these inflows. Money Market Products Money market products (-€19.5 bn) were the asset type with the highest net

Even though the topic of proper classification of mixed-asset funds doesn’t sound like a point of particular interest, it has raised issues for fund promoters, fund selectors, and investors alike. It gathered a lot of interest during the ”Petersberger Treffen,” a conference organized by the German consultant Drescher&Cie in Cologne on December 7, 2017. Once upon a time – funds were simply constructed In the good old days of the investment industry the life of fund selectors and investors was much easier, since equity funds invested straightforwardly in equities—as did their fixed income peers with bonds. Even mixed-asset funds were

Fund Market Overall Assets under management in the global collective investment funds market grew US$392.3 billion (+1.0%) for March and stood at US$39.23 trillion at the end of the month. Estimated net inflows accounted for US$126.9 billion, while US$265.4 billion was added because of the positively performing markets. On a year-to-date basis assets increased US$2,049.8 billion (+5.5%). Included in the overall year-to-date asset change figure were US$417.2 billion of estimated net inflows. Compared to a year ago, assets increased a considerable US$3,640.8 billion (+10.2%). Included in the overall one-year asset change figure were US$1,022.0 billion of estimated net inflows. The

In terms of the estimated net sales for 2015, mixed-asset funds were—for the first time since Lipper has run this statistic—the best selling asset type in Europe. As was to be expected, this led to an increase in the assets under management of mixed-asset products registered for sale in Europe, up from €1,150.2 billion to €1,360.2 billion over the course of the year. This increase of €210.0 billion was driven mainly by the performance of the funds, which contributed €114.5 billion, while net sales contributed €95.5 billion to the overall growth in the assets under management. With regard to the