Sun, Aug 28, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Cerulli finds European institutional and retail investors approach risk differently

Tuesday, October 02, 2012
Opalesque Industry Update: Investors who like to trade volatility have been putting money into volatility exchange-traded funds (ETFs) like never before, according to the September issue of The Cerulli Edge-European Monthly Product Trends. Assets under management (AUM) topped €810 million ($1 billion) as of August 2012, up from €308 million ($396 million)in 2011 and €47.4 million ($60 million) in 2010." The ability to hedge the volatility risk associated with an investment portfolio is particularly appealing to institutional investors during times of market uncertainty, but these sophisticated products have limited appeal to retail investors, who continue to vacillate between fixed income and equity products as part of their risk-on/risk-off approach," said Barbara Wall, a director at Cerulli Associates in London.

Predictable sector winners in July were bond funds, which attracted €21 billion in net inflows-the highest level in more than 10 years. Flows were given a significant boost from the money market sell-off (€35 billion was redeemed from the sector in June and July).

Asset allocation funds were also in positive territory to the tune of €1.5 billion. "Increasingly, investors see asset allocation as providing a much-needed exit route from equity markets should the eurozone crisis escalate," explained Yoon Ng, a Cerulli associate director.

Emerging market equities were the top equity sector by net new flows, attracting €639.2 million, although only a handful of funds benefitted. Appetite for equity exposure did not extend to global equity funds, which registered a second consecutive month of outflows.

"While risk aversion is understandable, investors are missing opportunities," Wall added. U.K. smaller companies and European smaller companies were the top performing IMA sectors YTD July, with returns of 13% and 11% respectively. Is it time to take a deep breath and rethink investment strategies?

ETFs continue to enjoy healthy flows and are steadily expanding their retail presence in Europe. ETFs are increasingly popular with advisors, who have started to look at them as the key building blocks of a portfolio.

The Swiss market was one of the few that posted positive net sales in July (CHF1.6 billion, €1.3 billion). The money market sell-off in the rest of Europe did not affect Switzerland-money market funds with exposure to the U.S. dollar and Swiss franc attracted CHF600 million combined.

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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new