Franklin Templeton, M&G and Natixis have topped the Morningstar list of fund houses with the biggest outflows.
According to latest available figures from the research house, Franklin Templeton saw outflows of €3.1bn (£2.4bn) in January, marking a continued loss of its long-term funds.
Two thirds of Franklin Templeton’s January outflows came from fixed-income, while another €935m (£728bn) left its equity funds.
In January, M&G suffered outflows of €2.1bn (£1.6bn), of which the Optimal Income fund was responsible for more than half; a trend which has been ongoing for 10 months.
In fact, seven of Europe’s 10 largest funds saw outflows during December. As a result of its outflows, M&G Optimal Income dropped from its position as Europe’s largest long-term fund at the end of 2014 to number six at the end of 2015.
Meanwhile, Natixis saw €1.6bn (£1.3bn) pulled from its funds in January, of which €1.3bn (£1bn) left its Reaumur Actions fund, previously called ABP Diversifié. Natixis recently changed the strategy of the fund to an equity-income approach.
The table below shows the providers with the highest outflows.
|Fund Provider||January Outflows (bn)||Fund Provider||Full Year Net Flows 1.2.15-31.1.16 (bn)|
|1. Franklin Templeton||€3.12 (£2.43)||1. Franklin Templeton||(€24.02) (£18.69)|
|2. M&G||€2.14 (£1.67)||2. M&G||(€18.84) (£14.66)|
|3. Natixis||€1.56 (£1.22)||3. Swiss Re||(€1.67) (£1.30)|
|4. Invesco||€1.46 (£1.14)||4. Danske Invest||(€0.75) (£0.58)|
|5. Swiss Re||€1.42 (£1.09)||5. Axa||€1.24 (£0.97)|
|6. JPMorgan||€1.27 (£0.99)||6. Schroders||€1.35 (£1.05)|
|7. Schroders||€1.26 (£0.98)||7. Natixis||€2.72 (£2.12)|
|8. Axa||€1.25 (£0.97)||8. Invesco||€5.17 (£4.03)|
|9. Pioneer Investments||€1.15 (£0.90)||9. JPMorgan||€6.21 (£4.84)|
|10. Danske Invest||€1.10 (£0.86)||10. Pioneer Investments||€7.20 (£5.61)|
Ben Seager-Scott, director of investment strategy at Tilney Bestinvest, said that over a monthly timeframe, flows are generally driven by asset allocation movements rather than anything else.
“Even if a particular house style moves out of favour, or investors turn sour on a particular fund, that tends to manifest over a period of many months if not years.
“Looking at the asset class flows, by far and away the biggest movement has been out of corporate and high yield bonds, and this is an area that M&G are particularly well known for.”
According to Morningstar, European investors made significant withdrawals from long-term open-ended funds at the start of the year, in the wake of turbulent equity markets and falling yields, which cut into the expected returns of fixed-income investments.
Bond funds saw the largest outflows, with €15.8bn (£12.3bn) exiting the asset class during January.
Ashis Dash, manager research analyst for Morningstar, said a number of fixed income strategies were out of favour in 2015, driven by wider macro reasons, such as Europe’s quantitative easing programme, interest rate hikes in the US and the collapse of commodity prices.
“A combination of these, along with some fund specific reasons, led to outflows from a number of fixed income strategies, therefore affecting some of the large fixed income houses such as M&G and Franklin Templeton.
“However it wasn’t doom and gloom for all fixed income sectors,” he said, pointing out that some sectors - such as global flexible bonds and the euro high-yield sectors - did see inflows in 2015.