The assets of funds and ETPs (Exchange traded products) globally amount to 30 trillion dollars (data as at 31 December 2014). The estimate is contained in Global Flows report published by Morningstar, which records an increase in assets compared to 27 trillion in 2013, with record net flows of 1,3 trillion (less than trillion in 2013). The protagonists were above all global equity products, which raised around a third of the total.
- United States they remain the largest managed market and account for 57% of the total, but Europe and Asia are expanding at a faster pace. In terms of organic growth rate (flows as a percentage of initial assets), the Orient posted the largest increase (+12,8%), followed by the so-called funds cross-border, who are domiciled in tax havens such as Luxembourg or Ireland (+10,4%).
The advance of passives
Passive funds and ETPs are gaining popularity especially in the United States and among equity fund subscribers, in parallel with the emergence of independent advisory models. In Europe, the trend is not as clear-cut as overseas, but during 2014 there were signs of increased interest in these products. The distribution structure constitutes a brake on development, since it is still largely based on the banking network and commission retrocession mechanisms.
… and alternatives
The study also reveals another trend that characterized 2014: the increase in assets of alternative funds, which adopt strategies similar to hedge funds. L'organic growth rate it was 15,6%, the highest among the various types. The balanced investments continued to attract investments (+268 billion), which recorded an increase of 9,7% and show less volatile flows than the equity sectors, which collected 439 billion, and bonds (+371 billion). On the other hand, it was a difficult year for commodity products (-2,9%), penalized by the drop in the price of oil and other raw materials. There are, however, strong differences in savers' preferences from country to country. For example, in the United States, equities capture the largest flows, while among cross-border fixed income prevails and in the Old Continent allocation funds.
"Where 2013 was the year investors put their confidence back in stock markets, 2014 was dominated by interest rates," says Alina Lamy, senior market analyst at Morningstar. “Although the hunt for value has become more difficult in fixed income, savers have favored the lower volatility of this asset class.”
Pimco and Vanguard, opposite destinies
At the corporate level, 2014 was a busy year. Bill Gross's resignation on Sept. 26 fueled buyouts from Pimco, the company he founded. Overall, outflows totaled approximately $176 billion worldwide, representing a 26% decrease in assets. Conversely, Vanguard, the largest fund product house and the second largest ETP issuer in the world, continued its run, reaching 3 trillion assets. The wide range, the ability to exploit economies of scale and pass them on to investors in the form of increasingly low fees have allowed John Bogle's firm to earn a strong reputation among savers. Vanguard's active funds business has also increased and is now worth over 900 billion.
The study is based on data from 3 management groups in 74 domiciles for a total of 89 portfolios and over 200 fund classes.
