Schroders' intermediary inflows continue to struggle

Schroders' intermediary inflows continue to struggle

Schroders secured £4bn of net inflows into its "branded funds" business from intermediaries in the first half of 2017, but saw overall sales fall due to outflows from its sub-advised business.

The firm said there were net outflows of £1.2bn from its intermediary business owing to £5.2bn in sub-advised mandate redemptions.

The £4bn of net inflows into its funds business was dominated by demand for equity strategies, which Schroders said demonstrated improving investor sentiment.

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The overall intermediary business continues to struggle, however, with the six month outflows coming after £2.9bn of net redemptions in 2016.

As in 2016, the firm's institutional business helped alleviate pressure on the intermediary arm. In the first half of 2017, institutional net inflows reached £1.4bn, leaving the company with combined net inflows of £200m for the period.

Assets under management (AUM) saw strong growth despite the struggles in sub-advised mandates. Intermediary AUM rose 3.8 per cent over the six months to £125bn. Overall AUM in the asset management business rose to £363bn from £346bn.

The firm's wealth management business also saw net inflows of £600m - the majority of which came from a single mandate. AUM rose 10 per cent to £43.6bn.

Schroders also secured a rise in profits, particularly when compared with what was a difficult opening six months of 2016. Asset management profit before tax rose to £301m in the first half of 2017 compared with £249m in the same period last year.