LIPPER EXPERT FORUM LONDON 2011

Transcription

1 LIPPER EXPERT FORUM LONDON 2011

2 WELCOME DR RICHARD RAMYAR GLOBAL HEAD OF RESEARCH, LIPPER 2

3 LATEST TRENDS IN EUROPEAN MUTUAL FUND DISTRIBUTION MAURO BARATTA DIRECTOR, LIPPER

4 NET SALES HISTORY IN EUROPE bn Money Market 'Long Term' Sep 4

5 EUROPEAN NET SALES BY ASSET CLASS bn Other Bond Mixed Equity YTD 2011 Sep Money market funds excluded 5

6 EUROPEAN NET SALES IN 2011 bn Equity Mixed Bond Other 60 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Money market funds excluded 6

7 A SEA OF RED - EUROPE SUFFERING OUTFLOWS 7

8 MARKETS AND PRODUCTS

9 INVESTORS CONCERNED OVER SAFETY 9

10 MONEY MARKET FUNDS OUT OF FAVOUR bn Institutional Retail YTD

11 BLEAK FUTURE FOR MONEY MARKET FUNDS Extremely low interest rate environment in Euro Zone and United Kingdom Banks appetite for liquidity across Europe to boost reserves clients savings channeled into bank deposits Money market funds unable to compete against other savings vehicles (mainly bank deposits) Are cash funds really safe? Is investors perception changing? 11

12 NET SALES OF EQUITY FUNDS IN EUROPE m 130,000 80,000 30,000-20,000-70,000 Developed Market Emerging Markets Regional/Core Theme/Speciality -120, YTD Sep 12

13 ETF SUCCESS SIMILAR TO 2008 FOR EQUITIES 150, ,000 50,000 million 0-50, , ,000 Index trackers ETFs Active -200, Sep 13

14 SECTOR SUCCESS IN 2011 EQUITY 10,000 ETFs excluded 0 Market performance ( m) 10,000 20,000 30,000 40,000 Eq France Eq Latam Eq China Eq Euroland Eq Pac ex Japan Eq UK Eq Europe Eq Japan Eq Germany Eq Raw Mat/Energy Eq Emerging Markets Eq North America 50,000 Eq Global 60,000 12,000 10,000 8,000 6,000 4,000 2, ,000 4,000 6,000 8,000 10,000 Estimated net sales ( m) 14

15 FIXED INCOME SALES HISTORY m 120, , , , , Emerging Mkts Others -130, Corp Bond & HY Govt Bond -180, YTD

16 HIGH CONCENTRATION OF NET SALES 200 Fixed income funds Top 10 groups in 2009: 47% of inflows 50 m 129bn m 174bn m 63bn Top 10 groups in 2010: 54% of inflows 0-33bn m - 49bn m - 60bn m Top 10 groups in 2011: 60% of inflows 50 Outflows Inflows

17 MOST SUCCESSFUL BOND FUNDS IN 2011 Rank Fund Name Net sales m 1 Templeton Global Bond Fund 6,641 2 Templeton Global Total Return Fund 6,624 3 PIMCO GIS Unconstrained Bond Fund 1,858 4 AllianceBernstein - Global High Yield Portfolio 1,828 5 JPMorgan Funds - Income Opportunity Fund 1,261 6 PIMCO GIS Global Investment Grade Credit 1,225 7 Storebrand Global Kreditt IG 1,214 8 Eurizon Focus Strategia Flessibile - Obbligazioni ,128 9 Templeton Emerging Markets Bond Fund 1, Stone Harbor Emerging Markets Local Currency Fund 1,043 Rest -20,533 17

18 A CHANGING LANDSCAPE

19 THE RISE OF THE INDEPENDENTS AuM share by type of business of asset manager parent company December 2001 June 2011 Insurance 12% Other 2% Post office 1% Asset Management 27% Banks 58% 19

20 INTERNATIONALISATION OF THE FUND INDUSTRY 80% 60% 40% 20% Cross-border assets Domestic Europe assets 0% Sep 20

21 CROSS-BORDER v DOMESTIC NET SALES 21

22 BOUTIQUES TAKE A LARGER SLICE OF THE PIE 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 60+ funds funds funds <10 funds 0% Q3 Cross-border funds only 22

23 PRODUCT DEVELOPMENT

24 PROLIFERATION v RATIONALISATION 5,000 2, ,500-5,000 Launches Closures/mergers Net Change Sep 24

25 Domestic Europe: new launches v backlist funds 150, ,000 50,000 0 million -50, , , , , , ,000 'Backlist (launched in previous years) New Launches Q Note: UK funds and Cross-border funds excluded 25

26 Cross-border: new launches v backlist funds 250, , , ,000 million 50, , , , ,000 'Backlist (launched in previous years) New Launches Q

27 UNITED KINGDOM

28 UK SALES HISTORY BY ASSET CLASS - M 70,000 60,000 Oth MM Mixed Equity Bond 50,000 40,000 30,000 20,000 Mixed 78% of sales 10, , Sep Domestic activity only 28

29 UK SALES ACTIVITY IN 2011 (JAN-SEP) - M HOT Year 2011 Asset Allocation 5,193.7 Mix Conservative 3,765.0 Mix Balanced 3,038.1 FoFs Balanced 3,015.2 Equities Global 2,453.0 COLD Year 2011 Equities UK -3,236.7 Equities Europe -1,188.7 Equities Pac ex Japan -1,045.6 Equities Specialty Equities North America ,000 7,000 6,000 5,000 4,000 3,000 2,000 1, ,000 Fund of Funds (in house) Fund of Funds (ex house) Sep Domestic activity only 29

30 FOREIGN v DOMESTIC ACTIVITY IN UK Dec 2010 Foreign share of AuM* ( m) Foreign share of net sales* ( m) Foreign 8.9% Domestic 91.1% * Foreign AuM and sales data sourced from Lipper SalesWatch 30

31 What are fund selectors thinking? 31

32 What were fund selectors saying a year ago? Equities: which sector are you most positive on for the year ahead? Survey of delegates at Citywire Berlin

33 What were fund selectors saying a year ago? Fixed income: which sector are you most positive on for the year ahead? Survey of delegates at Citywire Berlin

34 What were fund selectors saying a year ago? Do you expect to invest in a Newcits fund in the next 12 months? Survey of delegates at Citywire Berlin

35 So what are they saying now? 35

36 We asked: what makes a good fund manager in times of crisis? Coherent management of the fund on the basis of the manager s long term ideas I want to see a manager sticking to his strategy even during times of crisis Consistency Consistency Consistency 36

37 37

38 The Newcits dilemma Our experience in the absolute return space hasn t really been full of joy and satisfaction. Investors wanted a safety net, to protect them from negative performance in the equity space. Clearly we haven t really seen absolute return investment delivering the kind of return we were expecting to see, as an asset class or as a pool of potentially investible funds. 38

39 But what do they want to talk about? Risk management Newcits Quantitative versus qualitative analysis Role of asset allocation Absolute return products 39

40 Where are the safe havens? 1. It s a real problem: cash is going backwards, government debt is difficult. So high yield and corporates. 2. No safe haven exists. The US is the safest. 3. Gold 4. German bonds 40

41 The conclusions Very little consensus everyone s looking for direction and not finding it Consistency and experience give the greatest comfort to fund buyers Newcits terminology debate is boring but the issue won t go away: investors are disappointed with absolute return but the hunger for all-weather strategies is strong 41

42 HAVE MANAGERS LEARNED THEIR LESSONS FROM THE CRISIS? DETLEF GLOW HEAD OF LIPPER EMEA RESEARCH

43 COMPOSITION OF THE STUDY

44 COMPOSITION OF THE STUDY Analysis of all Funds from the Peer groups: Equity Asia/Pacific Equity Europe Equity Global Equity North America 44

45 COMPOSITION OF THE STUDY Analysed Periods: 1. Analysis Period Dot-Com Bubble 2. Analysis Period Financial Crisis 45

46 COMPOSITION OF THE STUDY Ratios within the Analysis: Maximum Drawdown Relative Performance vs. Fundmanager Benchmark Tracking Error vs. Fundmanager Benchmark 46

47 ANALYSIS OF MAXIMUM DRAWDOWN

48 MAXIMUM DRAWDOWN EQUITY EUROPE 48

49 MAX DRAWDOWN EQUITY EUROPE Maximum Drawdown - Equity Europe /12/ /12/ /12/2005/ - 31/12/ Source: Lipper 49

50 MAX DRAWDOWN EQUITY ASIA Maximum Drawdown - Equity Asia/Pacific /12/ /12/ /12/2005/ - 31/12/ Source: Lipper 50

51 MAX DRAWDOWN EQUITY GLOBAL Maximum Drawdown - Equity Global /12/ /12/ /12/2005/ - 31/12/ Source: Lipper 51

52 MAX DRAWDOWN EQUITY NTH AMERICA Maximum Drawdown - Equity North America /12/ /12/ /12/2005/ - 31/12/ Source: Lipper 52

53 ANALYSIS OF RELATIVE PERFORMANCE

54 EQUITY EUROPE 1. ANALYSIS PERIOD Equity Europe - Relative Performance vs Fund Manager Benchmark AVERAGE Best Fund Median Worst Fund Source: Lipper 54

55 EQUITY EUROPE 2. ANALYSIS PERIOD Equity Europe - Relative Performance vs Fund Manager Benchmark 40 AVERAGE Best Fund Median Worst Fund Source: Lipper 55

56 ANALYSIS OF TRACKING ERROR

57 EQUITY EUROPE 1. ANALYSIS PERIOD 6 Equity Europe - Tracking Error vs Fund Manager Benchmark AVERAGE Best Fund Median Worst Fund Source: Lipper 57

58 EQUITY EUROPE 2. ANALYSIS PERIOD Equity Europe - Tracking Error vs Fund Manager Benchmark AVERAGE Best Fund Median Worst Fund Source: Lipper 58

59 CONCLUSIONS Maximum Drawdown is an essential measure of risk and therefore useable as proxy for risk budgeting. In terms of drawdown risk, broad market indices can be used as proxies for the risk level of funds investing in the respective markets. 59

60 CONCLUSIONS Regardless of the fact that some managers have outperformed the market, the average active manager has added no value for the investor during the analysed periods. The lower disparity across funds since 2006 reinforces the belief that relative risk management guidelines have tightened. 60

61 CONCLUSIONS Investors therefore have to focus on active asset class and sector selection more than before. Investors also have to try harder to find funds which show low or uncorrelated returns during rough market conditions. 61

62 EUROPEAN FUNDS INDUSTRY WAVING OR DROWNING? 62

63 PANEL DISCUSSION Angus Foote, Citywire Global Philip Warland, Fidelity Worldwide Investment Manuel Arrive, Fitch Ratings Bill Gourlay, RBC Dexia Ed Moisson, Lipper 63

64 DISCLAIMER Thomson Reuters All Rights Reserved. This presentation is for informational purposes only, and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. No guarantee is made that the information in this presentation is accurate or complete and no warranties are made with regard to the results to be obtained from its use. In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its affiliates. 64