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Alternative Market Briefing

Lipper's annual review of funds finds argument for performance fees on absolute return funds doubtful

Wednesday, March 27, 2013

Beverly Chandler, Opalesque London: Lipper’s Matthew Lemieux and Ed Moisson have published the annual review of the European fund industry, finding that sales across Europe totalled €230.4bn ($295bn) for 'long-term’ funds in 2012, the fifth best year for the industry over the last decade (behind 2005-06 and 2009-10). However, the firm writes, redemptions from money market funds totalled -€44.5bn ($56bn) over the year, and when these withdrawals are included the industry’s sales shrink to €185.9bn ($237bn) - only the seventh best total over the past 10 years.

Unsurprisingly the year’s sales were dominated by bond funds with inflows of €225.2bn ($289bn). High Yield bonds and Emerging Market debt funds together accounted for 40% of the net flows into the broader asset class.

Three groups attracted inflows into long-term funds of more than €10bn ($12bn): PIMCO, AXA and BlackRock.

Funds described by Lipper as asset allocation products are funds where the individual managers are able to invest across the spectrum as opportunities arise, often (but not always) with an absolute return targeted as part of an investment objective. Here Lipper finds that interest in such funds has been strongest in the UK over the past year, "but it is interesting to note that 115 asset allocation funds being sold cross-border were launched over the past year, with a further 51 launches of such products speci......................

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