Mood of the month

Fairly optimistic
The European fund buyer’s mood index kept slightly dropped also in April reaching 63.3 points (from 64.1 points in March). The downtrend was mainly driven by Austria, Switzerland and Sweden where respectively only 25%, 30% and 40% of the interviewed fund buyers declared to be optimistic over the next 12 months. On the other side the Spanish fund selectors confirmed their positive view with 84% optimistic responses about the next future.

Distributor commentary

For the week ending 19th May 2018
  • “Our core issue of how to construct a portfolio in a low-interest rate environment will remain topical. The active fund sector will recover the losses it made to the passive sector. As an end to the low-level interest rates is in sight, volatility will increase. Investors will consequently pay more attention to the active fund management again. Mr Sauren has recently bet a million Swiss Franc against the passive sector. He is still looking for someone to bet against him.”

    Drivers of change
    Switzerland, Funds of funds management
  • “I think the general impact of regulation could lead to more consolidation within the overall product offering. The effect of that will be positive to the extent that it weeds out the worst-performing funds. On the other hand, it will mean that fewer funds overall will be available in the market. Furthermore, those that remain will tend to be fairly bland products, because regulatory constraints will make life more difficult for providers of the more distinctive or niche types of funds.”

    Drivers of change
    United Kingdom, Private client portfolios - Discretionary
  • “Regulatory requirements like MiFID or the IDD-directives for distribution arms are important drivers for change in the fund industry. Fund companies and insurers will have to disclose their costs more transparently. In our capacity as insurance company, we don’t work actively with fund companies any longer, i.e. we don’t join them at road shows anymore. In our view, it’s up to fund companies themselves to achieve a high recognition factor among intermediaries and end-customers.”

    Drivers of change
    Germany, Insurance - including unit-linked products
  • “I would like to see 'smart' fund wrappers (such as ELTIF format, for example) being used to a larger extent, in order to provide greater opportunity for non-professional clients to get exposure to the more illiquid types of strategies. I would also like to see more thematic funds being introduced.”

    Product innovation requirements
    Sweden, Private client portfolios - Advisory
  • “Thematic funds are still the main innovation. I have in mind for example cyber safety or environmental themes, which become criteria to be considered because they undeniably concern the world of tomorrow and are no longer merely fads. With respect to absolute return, we are currently seeking strategies to try and circumvent any market events.”

    Innovative behaviour in fund industry
    France, Private client portfolios - Discretionary
  • “I have noticed a change within the sphere of flexible funds. In the past, these products remained very traditional but now they are run with an increasingly flexible investment style. I think that we are getting near to a change in the cycle. My impression is that there are an increasing number of asset managers with the capacity to address the changes and uncertainties that are arising in the market. They are doing so by launching investment vehicles that can function in any market scenario.”

    Innovative behaviour in fund industry
    Spain, Private client portfolios - Advisory

Active vs passive: the distributor view

28 May 2018
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By Fiona Maciver

Several months on from the arrival of Mifid 2, it’s a good time to review distribution-related developments in the active-vs-passive debate. Though possibly too early to identify meaningful trends, a combination of flows data and the qualitative feedback gathered during interviews with fund selectors nevertheless highlights current forces of change for both the active and passive camps. It

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