Q3 2017 IPREO REGIONAL FLOW OF FUNDS SERIES
Flow of Funds: Market Overview The September BAML Global Fund Manager survey found, Investor bullishness toward the Eurozone was now dissipating. Ronan Carr, European equity strategist at Bank of America Merrill Lynch is quoted saying, "Overall sentiment on the Eurozone is becoming less euphoric, with headwinds from a strong euro and investors' EPS expectations showing less momentum." This sentiment is evident in Ipreo s Q3-17 funds flow analysis; Q3-17 Western European () equity fund flows remained strong and positive (+$43.1B), but the pace of inflows decelerated from the preceding quarter. The bulk of net inflows into the region continued to be driven by North American managers (albeit at a slower pace) whilst the pace of UK & Ireland inflows doubled over the same period. At the regional level Scandinavia and Rest of World investors turned bearish on equities whilst the main money centres either side of the Atlantic continued to add exposure to the region. Scandinavian outflows were led by Growth investors Danske Capital (Denmark) and Varma Mutual Pension Insurance Company. The latest public filing data shows Danske Capital (Denmark) was pulling money from Telecommunications, Biotechnology and Pharmaceuticals, Insurance as well as Food Beverage, and Tobacco whilst buying Materials and Construction and Automotive sectors among others. All macro sectors within accounted for a positive change in the quarter as Financials was the top performing sector; Index and Growth investors were very bullish on equities in general, although Passive investors continue to outpace their Active counterparts in investment change. Passive investors The Vanguard, BlackRock and State Street topped the holding, buying and selling rankings respectively for equities. saw net inflows of +$7.6B in Q3-17 and is now a recipient of funds for four consecutive quarters. North America was once again the main driver of the net inflows in the current quarter under review but also across the last 12 months, with Growth (+$3.1B) and Index (+$2.7B) investors leading inflows. Vanguard (+$874.7M), Harris Associates (+$789.8M) and Artisan (+$644.6M) are the current top North American buyers. Beneficiaries of inflows from these top three North American buyers included BASF, Allianz, Daimler, Deutsche Telekom, Fresenius, Vonovia, E.On, Munich Re and Deutsche Post. As noted by Alexander Börsch of Deloitte Insights "The economic situation in continues to be rosy...supported by an improvement in industrial sentiment since the beginning of the year, capacity utilization in the German industry has now markedly moved past its long-term average and is currently at a nine-year high, suggesting a need for new investment. Institutional Investment Flow Highlights Net Change by Region Net Change by Style 10,000.0 8,000.0 8,000.0 6,000.0 4,000.0 7,000.0 6,000.0 5,000.0 4,000.0 2,000.0 3,000.0 0.0-2,000.0 2,000.0 1,000.0 0.0-4,000.0-1,000.0-6,000.0 W. Europe N. America UK & Ireland Scandinavia MENA Asia Other Q4-16 Q1-17 Q2-17 Q3-17 -2,000.0 Agg Gr./Growth Deep Val./Value Index GARP Specialty Yield Alternative Q4-16 Q1-17 Q2-17 Q3-17 UK & Ireland remained bullish for a second successive quarter. Notably Q3-17 inflows were driven in large part by Index investment (+$2.7B). State Street (+$2.1B) and BlackRock (+$508.0M) were the top two Index buyers while Growth investors BlackRock UK (+$986.0M) and Goldman Sachs International (+$624.0M) were amongst the top UK buyers. Siemens, Vonovia and Deutsche Bank were some of the common beneficiaries of UK investment inflows. remains a Value story, followed by Growth and then Index investors in terms of proportional holdings - all three types of investors were net buyers in the period. Growth investors topped buying (+$3.1B) followed by Index (+$2.7B) and GARP (+$1.5B) investors. BlackRock UK, Artisan and Goldman Sachs International topped Growth buying with common fund inflow beneficiaries being Allianz, Fresenius, Vonovia and SAP. Ownership by Investor Region vs Issuer Region Ownership by Investor Style vs Issuer Region E. Europe 0.2% E. Europe 0.1% Alternative 2.2% Alternative 2.7% Rest of World 0.6% Rest of World 0.6% Yield 1.8% Yield 2.4% MENA 3.2% MENA 1.2% Specialty 0.5% Specialty 1.3% Asia 0.6% Asia 1.1% Scandinavia 8.8% Scandinavia 16.3% GARP 6.0% GARP 6.2% UK & Ireland 18.3% UK & Ireland 16.3% Index 24.0% Index 18.5% W. Europe 36.2% W. Europe 27.7% Deep Val./Value 34.5% Deep Val./Value 37.0% N. America 32.3% N. America 36.7% Agg Gr./Growth 31.1% Agg Gr./Growth 32.0% When compared against a ownership benchmark, ownership of German equities by investors is overweight at 36.2% versus 27.7%. This is however offset by underweight proportional ownership by North American and Scandinavian investors. For ownership by Style, is generally on par with with the exception of being overweight in Index investors that are partially offset by being underweight in Value firms. There is a strong correlation in the pace of change for Active and Passives with both categories accounting for net inflows in recent quarters. German equities are a bit more favoured by Passive investors relative to therefore being a bit underweight when it comes to Active firms. All macro sectors registered net inflows led by Technology (+$2.2B), Consumer Services (+$1.7B) and Basic Materials (+$1.6B). The Automotive (+$1.5B) mid sector attracted the most investment followed by Telecommunications, Chemicals and Retail all above +$1.0B respectively.
MOST INVESTED MOST INVESTORS BOUGHT SOLD Flow of Funds: Active vs. Passive Investment (% Chg) Ownership by Orientation vs Issuer Region 30.0% 25.0% 20.0% 100.0% 80.0% 28.8% 25.1% 15.0% 60.0% 10.0% 5.0% 0.0% -5.0% Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 40.0% 20.0% 0.0% 71.2% 74.9% Active Passive Active Passive Most Bought & Sold Sectors - Active Investors Most Bought & Sold Sectors - Passive Investors -500.0 0.0 500.0 1,000.0 1,500.0 2,000.0 Basic Materials Consumer Goods Consumer Services Energy Financials Healthcare Industrials Technology Utilities -500.0 0.0 500.0 1,000.0 1,500.0 Basic Materials Consumer Goods Consumer Services Energy Financials Healthcare Industrials Technology Utilities Most Bought & Sold Stocks Security Industry Change $M SAP SE Computer Software and Services 1,128.5 METRO AG Retail 1,112.1 Deutsche Telekom AG Telecommunications 1,089.0 Covestro AG Chemicals 1,066.8 BASF SE Chemicals 967.5 Allianz SE Insurance 797.4 Volkswagen AG Automotive 775.1 Siemens AG Conglomerates 675.2 Deutsche Börse AG Financial Services 637.4 Deutsche Post AG Transportation 627.7 Includes Active & Passive Investors 8,876.6 Security Industry Change $M Stada Arzneimittel AG Biotechnology and Pharmaceutica -723.6 Henkel AG & Company KGaA Consumer Non-Durables -567.5 MTU Aero Engines AG Aerospace and Defense -543.1 Wirecard AG Computer Software and Services -480.5 Heidelbergcement AG Materials and Construction -466.2 Linde AG Chemicals -464.9 Deutsche Bank AG Banking -419.4 RWE AG Utilities -325.6 ProSiebenSat.1 Media SE Media -270.0 Deutsche Wohnen SE Real Estate -263.9 Includes Active & Passive Investors -4,524.7 Top Invested Cities Country / City Total Equity Assets Value Activity # Firms Country / City Total Equity Assets Value Activity # Firms United Kingdom (London) 2,957,531.0 130,720.5 3,005.5 229 United Kingdom (London) 2,957,531.0 130,720.5 3,005.5 229 (Frankfurt) 370,414.4 87,789.9-843.7 59 United States (New York) 3,844,121.2 37,257.6-31.2 205 France (Paris) 466,693.4 49,927.0 535.4 171 France (Paris) 466,693.4 49,927.0 535.4 171 Norway (Oslo) 677,148.1 42,175.7 78.4 15 Spain (Madrid) 75,116.4 5,471.2 186.1 81 United States (Boston) 4,166,499.3 39,595.8-262.4 58 (Frankfurt) 370,414.4 87,789.9-843.7 59 United States (San Francisco) 2,693,939.5 39,588.2 368.3 32 United States (Boston) 4,166,499.3 39,595.8-262.4 58 United States (New York) 3,844,121.2 37,257.6-31.2 205 Canada (Toronto) 820,415.2 7,356.2 81.5 53 United States (Malvern) 2,715,699.0 36,723.5 874.7 1 Switzerland (Zürich) 356,578.0 8,285.7-38.8 52 (Munich) 91,036.2 33,155.5 165.5 41 Luxembourg (Luxembourg) 41,125.8 3,124.0 102.5 52 (Leverkusen) 25,730.1 25,730.1 0.0 11 Sweden (Stockholm) 355,776.8 16,920.7 118.7 48 France (La Défense) 96,635.1 17,379.1 241.3 5 United States (Chicago) 1,001,919.5 16,260.7 991.7 47 Qatar (Doha) 83,415.5 17,122.5 0.0 3 (Munich) 91,036.2 33,155.5 165.5 41 Sweden (Stockholm) 355,776.8 16,920.7 118.7 48 Switzerland (Geneva) 114,234.9 3,628.6-11.5 38 United States (Chicago) 1,001,919.5 16,260.7 991.7 47 Japan (Tokyo) 877,523.1 1,760.0-27.9 33 United States (Los Angeles) 1,311,441.7 14,909.5 1,031.4 25 United States (San Francisco) 2,693,939.5 39,588.2 368.3 32 Includes Active & Passive Investors 605,256.4 6,273.6 950 Includes Active & Passive Investors 480,841.5 4,339.8 1,199
TOP SELLERS TOP BUYERS TOP HOLDERS Flow of Funds: Top Active & Passive Holders, Buyers & Sellers Firm Country Style Turnover Equity Assets Value Change % Portfolio % Portfolio Chg Norges Bank Investment Management (Norway) SWF Norway Value Low 634,147.4 41,041.0 257.5 6.5% 0.6% The Vanguard Group, Inc. P United States Index Low 2,715,699.0 36,723.5 874.7 1.4% 2.4% BlackRock Fund Advisors P United States Index Low 1,864,611.5 27,292.8 348.5 1.5% 1.3% Deutsche Asset Management Investment GmbH Value Low 134,880.1 27,123.0 924.7 20.1% 3.5% BlackRock Asset Management (Deutschland) AG P Index Low 51,796.4 21,100.9 873.2 40.7% 4.3% State Street Global Advisors, LTD P United Kingdom Index Medium 134,788.2 18,647.4 2,064.3 13.8% 12.4% Allianz Global Investors GmbH Growth Low 79,085.7 17,229.3 212.0 21.8% 1.2% Qatar Investment Authority SWF Qatar Growth Low 50,085.9 16,106.2 0.0 32.2% 0.0% Lyxor Asset Management SAS P France Index High 68,430.6 15,281.7 1,193.2 22.3% 8.5% Deka Investment GmbH Value Low 47,705.8 14,978.8 65.2 31.4% 0.4% BlackRock Advisors (U.K.), LTD P United Kingdom Index Low 167,541.8 14,691.7 508.0 8.8% 3.6% Else Kroener Fresenius Stiftung P Externally MaUnknown 12,560.8 12,560.8 0.0 100.0% 0.0% Union Investment Privatfonds GmbH GARP Medium 49,215.8 12,234.7 353.3 24.9% 3.0% Fidelity Management & Research Company United States Growth Low 902,364.0 11,514.2 340.9 1.3% 3.1% Amundi Asset Management S.A. France Value Medium 82,281.3 10,887.6-841.6 13.2% -7.2% Capital World Investors (U.S.) United States Value Low 671,885.9 10,437.4 417.2 1.6% 4.2% Dimensional Fund Advisors, L.P. (U.S.) P United States Value Low 394,896.0 8,964.2-107.0 2.3% -1.2% MFS Investment Management United States Value Low 280,126.5 8,436.0 27.4 3.0% 0.3% Harris Associates, L.P. United States Value Medium 112,167.1 8,180.6 789.8 7.3% 10.7% Kuwait Investment Authority SWF Kuwait Growth Low 24,130.8 7,437.4 0.0 30.8% 0.0% 340,869.2 8,301.5 Firm Country Style Turnover Equity Assets Value Change % Portfolio % Portfolio Chg State Street Global Advisors, LTD P United Kingdom Index Medium 134,788.2 18,647.4 2,064.3 13.8% 12.4% Lyxor Asset Management SAS P France Index High 68,430.6 15,281.7 1,193.2 22.3% 8.5% BlackRock Investment Management (U.K.), LTD United Kingdom Growth Low 367,430.2 6,846.7 985.9 1.9% 16.8% Deutsche Asset Management Investment GmbH Value Low 134,880.1 27,123.0 924.7 20.1% 3.5% The Vanguard Group, Inc. P United States Index Low 2,715,699.0 36,723.5 874.7 1.4% 2.4% BlackRock Asset Management (Deutschland) AG P Index Low 51,796.4 21,100.9 873.2 40.7% 4.3% Harris Associates, L.P. United States Value Medium 112,167.1 8,180.6 789.8 7.3% 10.7% Artisan Partners, L.P. United States Growth Medium 90,522.4 4,651.1 644.5 5.1% 16.1% Goldman Sachs Asset Management International United Kingdom Growth Medium 17,357.3 1,568.8 624.0 9.0% 66.0% BlackRock Advisors (U.K.), LTD P United Kingdom Index Low 167,541.8 14,691.7 508.0 8.8% 3.6% OppenheimerFunds, Inc United States Growth Medium 161,008.7 7,022.3 506.2 4.4% 7.8% Fidelity International Limited - FIL Investment Services ( United Kingdom Growth Medium 102,728.0 5,459.1 432.0 5.3% 8.6% Capital World Investors (U.S.) United States Value Low 671,885.9 10,437.4 417.2 1.6% 4.2% Union Investment Privatfonds GmbH GARP Medium 49,215.8 12,234.7 353.3 24.9% 3.0% BlackRock Fund Advisors P United States Index Low 1,864,611.5 27,292.8 348.5 1.5% 1.3% THEAM S.A.S. P France Index Medium 16,481.3 5,125.7 345.1 31.1% 7.2% Fidelity Management & Research Company United States Growth Low 902,364.0 11,514.2 340.9 1.3% 3.1% Capital Research Global Investors (U.S.) United States GARP Low 458,048.1 2,824.1 321.1 0.6% 12.8% Harding Loevner, L.P. United States GARP Low 35,605.4 2,801.9 318.2 7.9% 12.8% Invesco Advisers, Inc. United States Growth Low 180,310.3 3,351.7 313.5 1.9% 10.3% 242,879.3 13,178.4 Firm Country Style Turnover Equity Assets Value Change % Portfolio % Portfolio Chg ComStage ETF () P Index Very High 8,037.3 3,705.7-2,472.5 46.1% -40.0% State Street Global Advisors France S.A. P France Index Medium 19,688.5 1,039.1-954.6 5.3% -47.9% Amundi Asset Management S.A. France Value Medium 82,281.3 10,887.6-841.6 13.2% -7.2% Assenagon GmbH P Index Very High 19,124.8 7,044.8-644.3 36.8% -8.4% Northern Cross, LLC United States Value Low 30,534.7 2,770.7-583.0 9.1% -17.4% Henderson Global Investors, LTD (U.K.) United Kingdom Growth Medium 56,700.8 6,308.9-471.8 11.1% -7.0% J.P. Morgan Asset Management (UK), LTD United Kingdom Growth Medium 113,872.9 6,342.6-431.1 5.6% -6.4% First Eagle Investment Management, LLC United States Value Low 76,302.6 1,735.1-411.0 2.3% -19.2% Mondrian Investment Partners, LTD United Kingdom Value Low 22,006.8 860.7-368.0 3.9% -30.0% J.P. Morgan Investment Management, Inc. United States Growth Low 273,761.3 1,459.9-356.5 0.5% -19.6% MFS International (U.K.), LTD United Kingdom Growth Low 50,537.6 5,181.0-316.2 10.3% -5.8% Mellon Capital Management Corporation P United States Index Low 175,119.7 4,049.6-258.4 2.3% -6.0% UBS Financial Services, Inc. (Investment Advisor) United States GARP Low 164,904.8 259.0-256.7 0.2% -49.8% AQR Capital Management, LLC P United States Alternative Medium 97,338.2 1,022.0-252.6 1.0% -19.8% Columbia Threadneedle Investments (U.K.) United Kingdom Growth Medium 60,432.2 2,437.9-240.2 4.0% -9.0% RARE Infrastructure, LTD Australia Value Medium 3,665.8 22.8-229.1 0.6% -91.0% AXA Investment Managers Paris S.A. France Growth Low 16,505.2 2,244.1-222.6 13.6% -9.0% Baillie Gifford & Company, LTD United Kingdom Growth Low 141,746.7 3,451.9-217.3 2.4% -5.9% Investec Asset Management, LTD (U.K.) United Kingdom Growth Medium 43,225.0 369.6-214.2 0.9% -36.7% Capital Guardian Trust Company (U.S.) United States Growth Low 26,004.2 312.9-213.0 1.2% -40.5% Includes Investors with EUM greater than $100M. 61,505.8-9,954.8 SWF - Sovereign Wealth Fund; HF - Hedge Fund/Alternative; P - Passive Investor
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