Vanguard has overtaken Schroders to become one of the biggest fund managersin Europeand enter the region’s top 10 investment groups by assets.
The analysis, prepared for FTfm, excluded money market funds and segregated mandates.
The move highlights the fierce battle waged by low-cost index tracker providers against traditional active managers such as London-listed Schroders.
Pennsylvania-based Vanguard has made a determined push into Europe in the past decade, aiming to steal business away from more expensive active managers by promoting its low-cost passive funds. The $5.7tn group, which opened its first European outpost in London in late 2008, has launched offices in Frankfurt and Dublin in the past couple of years.
Vanguard is now ninth in the Morningstar list, up from 13th last year, while Schroders is 12th, down from ninth last year.
Vanguard also leapfrogged Nordea, another active specialist, and Fidelity International.
Schroders manages total assets of £444.4bn (€487bn). Including segregated mandates and wealth management, it oversees £265bn in Europe.
Karine Szenberg, Schroders’ head of Europe, said she was “pleased with the recent growth we have achieved in Europe, across our pan-European business”. She pointed to the opening of a new office in Helsinki as well as recent investments in impact specialist BlueOrchard Finance and German real estate boutique Blue Asset Management as areas of growth.
Passive providers dominated the top 10 fund providers. BlackRock, the world’s biggest asset manager with overall assets of $6.8tn, took the top spot. It managed assets of €731bn in open-ended funds and ETFs in Europe at the end of July. Its ETF arm, known as iShares, accounted for just under half of this.
Amundi took second place with European-domiciled assets of €302bn. The €1.5tn Paris-headquartered group manages €1.2tn in Europe once segregated mandates are included.
Assets in passive European funds are dwarfed by those in their actively managed counterparts, but are growing as investors switch to cheaper tracker and exchange traded funds.
“The cost discussion that is going on in Europe at the moment is one driver of growth,” said Detlef Glow, head of Emea research for Lipper at Refinitiv, the data provider.
Around 13 per cent of assets in European-domiciled funds are in passive products but he expects this to increase to 20 per cent over the next five years.
Bestselling funds this year include Pimco’s GIS Income fund, which attracted €16.9bn, taking the fund’s European assets to €68.5bn. Other top performers included AllianceBernstein’s American Income Portfolio, which had inflows of €8.5bn.
Six of the top 10 bestsellers were fixed income funds. Bonds funds have attracted assets this year as investors grappled with persistently low or negative interest rates and rising global tensions, including the fear of a recession, and ploughed into the asset class.
Morningstar’s list of worst-selling European fund managers this year is dominated by British brands, including Schroders, M&G and Standard Life Aberdeen. Bottom of the list is Carmignac, the French boutique, that has suffered €7.6bn of outflows.
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