Fri, Apr 18, 2014
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   |   
Banner
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. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  4. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an

  5. SEC allows investment funds to use social media[more]

    Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has released new guidance letting investment funds and advisors use social media to promote client reviews. The guidance seeks to assist investment managers in developing compliance policies and procedures reasonably