REFINITV. EUROPEAN FUND FLOWS REPORT: September 2018

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1 REFINITV EUROPEAN FUND FLOWS REPORT: September 2018 Please attribute the content to Detlef Glow, Head of EMEA Research at Lipper and the author of this report.

2 EXECUTIVE SUMMARY September 2018: A grim month for mutual funds September 2018 was the fifth month in a row with net outflows from long-term mutual funds after 16 consecutive months with net inflows. The overall fund flows for mutual funds in Europe amounted to net outflows of 40.5 bn for September. Real estate funds (+ 0.8 bn) were the best selling individual asset type overall for September. Equity Global (+ 3.3 bn) was the best selling sector among long-term funds for September. The United Kingdom (+ 2.0 bn) was the fund domicile with the highest net inflows, followed by Switzerland (+ 1.1 bn) and Norway (+ 0.4 bn). Goldman Sachs, with net sales of 2.7 bn, was the best selling fund promoter for September overall, ahead of CPR Asset Management (+ 1.6 bn) and Royal London (+ 1.3bn). The ten best selling long-term funds gathered at the share-class level total net inflows of 5.2 bn for September. Nikko Listed IDX Fund TOPIX (+ 0.7 bn) was the best selling individual long-term fund for September.

3 EUROPEAN FUND FLOWS, SEPTEMBER 2018 European Fund-Flow Trends, September 2018 European investors pulled further away from long-term mutual funds as the market environment and general sentiment stayed negative. As a consequence September was the fifth month in a row posting net outflows from long-term mutual funds after 16 consecutive months showing net inflows. Real estate funds (+ 0.8 bn) enjoyed net inflows, while all the other asset types in the segment of long-term mutual funds witnessed net outflows: bond funds (- 8.9 bn), alternative UCITS funds (- 8.0 bn), mixed-asset funds (- 1.9 bn), equity funds (- 1.3 bn), and other funds (- 1.0 bn) as well as commodity funds (- 0.6 bn). These fund flows added up to overall net outflows of 21.0 bn from long-term investment funds for September. ETFs contributed inflows of 5.6 bn to these flows. Money Market Products In this environment even money market products, which are often seen as safe-haven products, witnessed net outflows of 19.5 bn for September. Opposite to their actively managed peers, ETFs investing in money market instruments posted net inflows of 0.3 bn. This flow pattern led the overall fund flows to mutual funds in Europe to overall net outflows of 40.5 bn for September and to estimated net inflows of 5.9 bn for the year 2018 so far. Money Market Products by Sector Money Market GBP (+ 0.3 bn) and Money Market NOK (+ 0.2 bn) were the best selling money market sectors overall for September, followed by Money Market Other (+ 0.2 bn). At the other end of the spectrum Money Market EUR ( bn) suffered the highest net outflows overall, bettered by Money Market USD (- 4.1 bn) and Money Market Global (- 0.5 bn). Comparing this flow pattern with the flow pattern for August showed that European investors slightly rebuilt their positions in the Great Britain pound, while they reduced their positions in the U.S. dollar and the euro. These shifts might have been caused by asset allocation decisions as well as for other reasons such as cash dividends or payments, since money market funds are also used by corporations as replacements for cash accounts. Graph 1: Estimated Net Sales by Asset Type, September 2018 (Euro Billions)

4 Fund Flows by Sectors Within the segment of long-term mutual funds Equity Global (+ 3.3 bn) was the best selling sector, followed by Mixed-Asset USD Balanced-US (+ 1.4 bn). Bond USD High Yield (+ 1.1 bn) was the third best selling sector, followed by Bond Emerging Markets in Hard Currencies (+ 1.0 bn) and Equity US (+ 1.0 bn). Graph 2: Ten Top Sectors, September 2018 (Euro Billions) At the other end of the spectrum Bond EUR Short Term (- 2.6 bn) suffered the highest net outflows from longterm mutual funds, bettered by Absolute Return Euro Low (- 2.4 bn) and Equity Europe (- 2.2 bn) as well as Equity Emerging Markets Global (- 2.0 bn) and Bond Global (- 1.7 bn). Graph 3: Ten Bottom Sectors, September 2018 (Euro Billions)

5 Fund Flows by Markets (Fund Domiciles) Single fund domicile flows (including those to money market products) showed in general a negative picture for September, with only 10 of the 34 markets covered in this report showing net inflows and 24 showing net outflows. The United Kingdom (+ 2.0 bn) was the fund domicile with the highest net inflows, followed by Switzerland (+ 1.1 bn), Norway (+ 0.4 bn), Guernsey (+ 0.1 bn), and Andorra (+ 0.1 bn). On the other side of the table was France ( bn) driven by outflows from money market funds ( bn), which was bettered somewhat by Luxembourg ( bn) and Ireland (- 2.6 bn). Graph 4: Estimated Net Sales by Fund Domiciles, September 2018 (Euro Billions) Within the bond sector, funds domiciled in Switzerland (+ 0.9 bn) led the table for September, followed by those domiciled in the United Kingdom (+ 0.8 bn), Ireland (+ 0.4 bn), Jersey (+ 0.2 bn), and the Netherlands (+ 0.1 bn). Bond funds domiciled in Luxembourg (- 7.4 bn), France (- 1.4 bn), and Spain (- 0.7 bn) stood at the other end of the table. For equity funds, products domiciled in the United Kingdom (+ 2.4 bn) led the table for September, followed by funds domiciled in Ireland (+ 1.5 bn), Switzerland (+ 0.6 bn), and Norway (+ 0.3 bn) as well as Spain (+ 0.3 bn). Meanwhile, Luxembourg (- 2.9 bn), Belgium (- 1.1 bn), and Germany (- 0.7 bn) were the domiciles with the highest net outflows from equity funds. With regard to mixed-asset products Germany (+ 0.5 bn) was the domicile with the highest net inflows, followed by funds domiciled in the United Kingdom (+ 0.2 bn), Switzerland (+ 0.1 bn), Denmark (+ 0.1 bn), and Austria ( bn). In contrast, Luxembourg (- 1.3 bn), France (- 0.8 bn), and Italy (- 0.1 bn) were the domiciles with the highest net outflows from mixed-asset funds. France (+ 0.1 bn) was the domicile with the highest net inflows into alternative UCITS funds for September, followed by Sweden (+ 0.1 bn) and Denmark ( bn) as well as Germany ( bn) and Austria ( bn). Luxembourg (- 5.4 bn), bettered by the United Kingdom (- 1.8 bn) and Italy (- 0.8 bn), stood at the other end of the table.

6 Fund Flows by Promoters Goldman Sachs, with net sales of 2.7 bn, was the best selling fund promoter for September overall, ahead of CPR Asset Management (+ 1.6 bn) and Royal London (+ 1.3 bn). It is noteworthy that the flows of these promoters were driven by money market funds. Table 1: Ten Best Selling Promoters, September 2018 (Euro Billions) Considering the single-asset bases, BlackRock (+ 0.8 bn) was the best selling promoter of bond funds, followed by Swisscanto (+ 0.7 bn), Nordea (+ 0.6 bn), and State Street (+ 0.6 bn) as well as Russell Investments (+ 0.5 bn). Within the equity space BlackRock (+ 2.1 bn) stood at the head of the table, followed by UBS (+ 1.1 bn), Amundi (+ 0.7 bn), and Royal London (+ 0.5 bn) as well as Societe Generale (+ 0.4 bn). Allianz (+ 1.3 bn) was once again the leading promoter of mixed-asset funds in Europe, followed by Union Investment (+ 0.4 bn), Janus Henderson (+ 0.2 bn), and KBC (+ 0.1 bn) as well as La Caixa (+ 0.1 bn). H2O Asset Management (+ 0.3 bn) was once again the leading promoter of alternative UCITS funds for the month, followed by Insight (+ 0.2 bn), Ferox Capital (+ 0.2 bn), and AQR Capital Management (+ 0.2 bn) as well as Man Investments (+ 0.1 bn). Best Selling Funds The ten best selling long-term funds gathered at the share-class level total net inflows of 5.2 bn for September. Since only real estate funds enjoyed net inflows for the month, it was surprising that the sales table for the ten top single funds for September was dominated by equity funds (+ 4.0 bn). Table 2: Ten Best Selling Long-Term Funds, September 2018 (Euro Millions)

7 For more information, please contact our Lipper Research Team: Detlef Glow Head of Lipper EMEA Research Phone: +49(69) Robert Jenkins Global Head of Research, Lipper Phone: +1 (617) Xav Feng Head of Lipper Asia Pacific Research Phone: Otto Christian Kober Global Head of Methodology, Lipper Phone: +41 (0) Jake Moeller Head of Lipper United Kingdom & Ireland Research Phone: +44(20) Tom Roseen Head of Research Services Phone: +1 (303) Media enquiries: Eddie Dunthorne Lipper U.S. Client Services customers.reuters.com/crmcontactus/support.asp Lipper Europe Client Services (UK) (Europe) customers.reuters.com/crmcontactus/support.asp Lipper Asia Client Services customers.reuters.com/crmcontactus/support.asp Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks and trademarks of Refinitiv and its affiliated companies.