Tue, Feb 21, 2017
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. With $54bn in assets, Philippines is ready for hedge funds, alternative investment products[more]

    Komfie Manalo, Opalesque Asia: With the country's outstanding fund management industry at $54bn and growing, the Philippine market and its investors are ready to invest in "more sophisticated" asset management products, like hedge funds and alternative investments, said Deanno J. Basas, presi

  2. ...And Finally - Truth in advertising[more]

    From Newsoftheweird.com: Girl Scout Charlotte McCourt, 11, of South Orange, New Jersey, saw her sales zoom recently when she posted "brutally honest" reviews of the Scouts' cookies she was selling -- giving none of them a "10" and labeling some with dour descriptions. She was hoping to sell

  3. Europe - Brexit - Updated legal guide, Euro exchange rates set to tumble as hedge fund's super computer predicts Marine Le Pen will be next French president, Swiss fund market hits all-time high[more]

    Brexit - Updated legal guide From Herbertsmithfreehills.com: When we began analysing in depth the possibility of Britain exiting the EU (Brexit), 18 months prior to the June 2016 referendum, the business consensus was very much that Brexit was a remote prospect that either would never hap

  4. People - Gramercy appoints Bradshaw McKee as managing director of Capital Solutions, Trump taps Cerberus's Feinberg to lead intelligence review[more]

    Gramercy appoints Bradshaw McKee as managing director of Capital Solutions Gramercy Funds Management LLC, a $5.8 billion dedicated emerging markets investment manager, today announced the appointment of Bradshaw McKee to the position of Managing Director, Capital Solutions and Distressed

  5. Hedge fund investor redemptions accelerate through 2016[more]

    Despite hedge funds returning 7.40% over 2016, investors continued to withdraw capital over the year; the industry saw overall net asset outflows totalling $110bn in 2016. Preqin's latest research finds that the rate of redemptions accelerated through the year, from net outflows of $14bn in Q1 to $4