Money managers under the microscope
from Global Investing:
We're at risk of labouring this point, but there has been some more evidence that this year's equity rally has not been spurred by a shift away from fixed income. The latest data from our corporate cousins at Lipper offer pretty definitive proof that there has been no Great Rotation, at least not from bonds to stocks.
Worldwide mutual fund flows numbers for February showed an overall move into equity funds of more than $22 billion, and a net flow to bond funds of about half that. Over 3 months it's a similar story, with a net inflow to equities of about $84 billion while bond funds sit close behind at about $75 billion. Little wonder then that there is some evidence at least of movements out of money market funds.
In fact, maybe HSBC called it about right last week. In a note, their cross-asset strategists reckoned a pick-up in economic growth might support a 'minor' cyclical rotation into equities from bonds, but a longer-term structural shift between the two asset classes as part of a 'Great Rotation' was less likely.
You can play around with the full interactive graphic by clicking on the image below. If you have any problems, the link is here: http://r.reuters.com/ryk34t
from Global Investing:
Lipper has released its monthly look at fund flow trends in Europe, and as ever, it throws up some intriguing results.
August saw bond funds again dominate inflows, pulling in a net 20.8 billion euros and just a tad down on July's record. Stocks funds continued to suffer, as British equity products led the laggards with close to 2 billion euros withdrawn by clients over the month. North American equity funds and their German counterparts also saw big outflows.
Interesting to see two fund firms still winning new business, in spite of recent market turbulence.
Both Polar Capital and BlueBay reported roughly $300 mln of net inflows in the last quarter, showing that despite a sharp sell-off in markets, there is still demand out there.
Having more than halved in the year to March, Polar’s assets edged upagain to $2 bln, from $1.9 billion at end-Sept and $1.5 bln in March.
UBP — which had exposure of about 1 billion Swiss francs to Madoff’s firm — on Wednesday said hedge fund assets had slumped by 20 billion Swiss francs in the first half and are now more than half the level achieved at the peak in June 2008. To be fair, the private bank isn’t giving up easily and has hired in new managers to liven up its offering.
RAB Capital’s results this morning — showing an expected 32 percent fall in assets but signs of net inflows into its single-strategy hedge funds — also reveal how its managers are positioning their portfolios.
Despite a further 5 percent performance loss year-to-date at Special Situations, after last year’s big losses, performance at RAB’s other funds has been strong — the Energy fund is up 55 pct, the Global Mining fund 42 pct, the Gold and European Credit Opportunities funds 20 pct in H1.