Thu, Apr 27, 2017
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. Alternative asset firm YieldStreet surpasses $100m of loans funded in less than 8 quarters[more]

    Komfie Manalo, Opalesque Asia: Alternative asset investment platform YieldStreet reported that it has surpassed $100m in loans funded in less than eight quarters from accredited investors and single family offices. YieldStreet was founded by Milind Mehere and Michael Weisz. In a

  2. Investing - Investor appetite for high-growth IPOs to be tested, Apollo boosts fund's stock allowance for 'diamonds in the rough', Hedge funds uncertain over outlook for Hargreaves Lansdown[more]

    Investor appetite for high-growth IPOs to be tested From FT.com: The US listings market is poised for a busy week with deals that will test investors' appetite for high-growth - but lossmaking - companies. Eight new listings are scheduled for this week, the most since October of 2016,

  3. Hedge funds holding Puerto Rico bonds are looking at a long battle[more]

    Komfie Manalo, Opalesque Asia: Hedge funds which bought Puerto Rico's distressed debt bonds are facing the prospect of a long road ahead to recover their investments as the Caribbean island is attempting to use a U.S. Congress-approved rule that allows it to exploit a bankruptcy-like proceedings

  4. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  5. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V