UBS Asset Management has leapfrogged Amundi as the largest European manager of retail investor assets, as wild market swings this year led to a reversal in the fortunes for the region’s leading fund managers.
UBS increased its assets in retail and exchange traded funds to €308bn in the first half of 2020, making it the biggest Europe-headquartered manager of such funds, according to data provider Morningstar.
The Swiss group’s rise coincided with a bruising half-year for Amundi, which previously held the title. Investors withdrew a net €8.9bn from Amundi’s retail funds sold to European investors over the period, with assets in the strategies down from €319bn to €287bn.
US giant BlackRock retained its position at the top of the Morningstar ranking, which excludes institutional mandates and money market funds. The group managed €814bn in European retail investor assets across its active fund business and passive iShares unit at the end of June.
Investors’ fee sensitivity was another reason behind shifts in the manager ranking. Low-cost Vanguard jumped six places year on year to rank just below Amundi, displacing established active houses including JPMorgan, Credit Suisse and Pimco.
The shake-up underlines how the market ructions unleashed by the pandemic knocked some managers off course while boosting others.
“There has been some mixed results for asset managers with some seeing hugely positive inflows while others have had a tougher time,” said Ryan Hughes, head of active portfolios at investment platform AJ Bell.
UBS’s net inflows of €9.3bn were driven by investor demand for its US government and investment-grade corporate fixed income funds on the back of the Federal Reserve’s emergency bond-buying programme, said Morningstar analyst Wing Chan. It also benefited from flows into its China equity fund range, which is the largest of any global investment house, according to Morningstar.
By contrast, Amundi suffered significant redemptions from several of its ultra-short euro bond funds and its emerging markets strategies. It declined to comment.
UBS and Amundi have long jostled for the position of Europe’s largest fund manager, with Amundi holding the crown for the last two years. The French asset manager, which was formed via the merger of the fund units of Société Générale and Crédit Agricole, has achieved strong growth since its 2017 purchase of Pioneer Investments, which increased its international distribution reach.
UBS held the title of world’s largest asset manager before the global financial crisis but struggled to recover after haemorrhaging of assets in 2008. A senior fund industry adviser who asked not to be named said UBS’s recent progress was due to better client service and closure of many “bells and whistles” funds.
The adviser cautioned UBS was a “work in progress” and it was too early to tell whether the shift in the ranking would be long lasting. “Fund managers’ fortunes ebb and flow. Some investment strategies work in some environments but not others,” the person said.
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