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Sterling strength hits Schroders assets in Q2

Sterling strength hits Schroders assets in Q2

Schroders recorded an increase in profit after tax of roughly 23 per cent to £229.2bn at the end of June compared with £186.2bn a year earlier, but currency strength and market volatility hit assets under management.

In its half year results the company reported its total assets under management reached £309.9bn at June 30 2015 down from £319.5bn at the end of March. Although the figure is above the £300bn recorded at the end of December 2014.

Schroders stated: “After a strong start to the year, mounting uncertainties in the eurozone and in China led to increased volatility in financial markets towards the end of the period. In addition, the strength of sterling in the second quarter had the effect of reducing assets under management by £10.2bn by comparison with March 31 2015.”

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In its asset management division Schroders recorded an overall 12 per cent increase in net revenue, with assets under management increasing to £277.9bn at June 30 compared with £268.9bn at the end of December. Although this is a drop from the £286.9bn in assets recorded at the end of March 2015.

Meanwhile the intermediary business saw net inflows of £4.8bn across equities, fixed income and multi-asset. In particular it saw high levels of net sales in continental Europe and Asia Pacific. helping steady intermediary assets under management at £102.4bn, slightly lower than the March figure of £105.9bn.

Michael Dobson, chief executive at Schroders, added: “We generated £8.8bn of net new business in the first half of 2015 despite heightened volatility in markets towards the end of the period. Net inflows were particularly strong in fixed income and, regionally, in Asia Pacific and Continental Europe. Profit before tax and exceptional items was up 17 per cent and the interim dividend is increased by 21 per cent.”