Mon, Sep 15, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

First half of 2012 sees $350bn record inflows to bond funds

Monday, August 13, 2012
Opalesque Industry Update - Bond fund sales around the world are continuing at a record pace with $350 billion in net inflows during the first half of 2012, according to Strategic Insight, a business intelligence provider to the global fund industry. Exposures are changing most visibly in Europe where investors are migrating to high yield, emerging and global debt. These categories are capturing two-thirds of bond fund inflows, and account for 37% of bond fund assets in Europe compared to 20% in 2004.

As fund managers try to meet the demand for income solutions, they are addressing the evolving risks including potential outcomes during future periods of inflation and rising interest rates. “Investment companies are encouraging diversified sources of income with increasingly flexible approaches, and more specialized bond strategies,” says Jag Alexeyev, head of global research at Strategic Insight.

These include emerging corporate debt, local currency, short-duration high yield, emerging Asia and Renminbi products, flexible/multi-sector income, bond-centric absolute return, fixed income with macro overlays, long/short and alternative credit, socially responsible income, and target date bond structures. Alexeyev adds that firms with significant or concentrated sales are becoming more proactive about managing capacity, and developing multiple capabilities around their flagship funds.

In the past three years, over eighty actively-managed bond funds in Europe achieved at least €1 billion of net inflows each, serving as “flagship” investment products for more than forty companies. Together, these flagship income funds collected $335 billion (€230 billion) of combined inflows since early 2009.

Perceptions of bonds as “safer” income-producing investments remain supported by high levels of equity volatility. In Europe, equity funds had negative returns in eight out of the twelve months ending in May, a ratio not seen since the 2008-09 financial crisis. Although equity funds recorded net redemptions lately in aggregate, several individual products achieved high cash inflows during the past two quarters, particularly with global, Asia, emerging market, and dividend equity themes.

Importantly, many fund managers are expanding their commitments in select global markets, especially in Europe where competitive and regulatory changes are opening up opportunities. International managers are becoming more active across Europe as the region’s banks rethink the role of their in-house fund units, and as advisory models gravitate towards fee-based arrangements. Long-term fund inflows exceeding $730 billion (€530 billion) over the past three years in Europe and cross-border, achieved despite the slowdown since last summer, provide further encouragement for strategic expansion plans.

Around the world and across all long-term asset classes excluding money markets, funds collected nearly $400 billion of net inflows during the first half of 2012. With continued demand for income and diversified investments, the second half of the year could bring a similar level of commitments.

Press release

bc

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds show interest in Alibaba, Maglan joins other hedge funds in rush to Argentinian assets[more]

    Big hedge funds show interest in Alibaba From Hereisthecity.com: …Three other major hedge fund investors who have shown interest in the IPO are Dan Loeb of Third Point, David Tepper of Appaloosa Management and Dan Benton of Andor Capital Management. All three were among the roughly 800 p

  2. Socially responsible investments provide higher yield[more]

    Komfie Manalo, Opalesque Asia: A study by New Amsterdam Partners showed that asset managers with high ESG (environmental, social and governance) ratings provide higher gains with their portfolios compared to managers with low ESG ratings. In a study entitled

  3. Rothschild sees ‘new monetary world’ and recommends hedges[more]

    From Valuewalk.com: Rothschild Wealth Management is concerned about complacency and somewhat befuddled about the potential for stimulus in the Eurozone given the economic indicators. In their September “Market Perspective” report, Rothschild observed that while the risks in the Ukraine and Syria are

  4. SEC charges Minnesota hedge fund manager with fraud[more]

    Bailey McCann, Opalesque New York: The SEC has brought charges against Minneapolis-based hedge fund manager, Steven R. Markusen for bilking investors out of fees and portfolio pumping. According to the complaint, the management fees earned by Archer Advisors LLC were shrinking due to the funds’ w

  5. …And Finally – Immature[more]

    From Newsoftheweird.com: Princeton University professor John Mulvey, 67 (who teaches financial engineering applications), was charged in July with stealing 21 yard signs around the town of Princeton -- signs for a computer repair business owned by a man with whom he was feuding. Nathan McCoy,