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Institutional Asset Management Biz Sees Asset In-Flows after 11 Quarters of Out-Flows
Long-term trends in the industry, including the BREXIT vote, interest in ESG investing impacting institutional investment moves.
The institutional asset management industry reported net inflows of $19.7 billion in 3Q 2016 after 11 consecutive quarters of net outflows from the industry.
Several trends and topics in the industry, including reaction to the BREXIT vote, interest in ESG investing and active vs. passive investment strategies, are beginning to move the needle on investment activity.
And while there was a large outflow from U.S. domiciled accounts in 3Q, many of the in- and out-flows were small in 3Q, perhaps indicating investor and manager caution leading up to the U.S. presidential election in November.
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A few interesting points from the report include:
- Fixed income products reported net inflows of $132.0 billion, while equity strategies reported net outflows of $116.0 billion in 3Q.
- Passively managed equity strategies continued to attract assets in 3Q, with inflows of $19.0 billion in 3Q, while actively managed equity strategies reported net outflows of $135.0 billion.
- U.S. domiciled accounts reported $123.6 billion in outflows, which were driven by redemptions from U.S. equity strategies.
- After many quarters of strong search activity on the eVestment database, ESG strategies saw $2.6 billion in inflows. Public pensions remain the largest ESG investors in terms of AUM, but in 3Q inflows were driven by foundations and endowments.
- UK domiciled investors were net buyers during 3Q 2016 with in flows of $3.7 billion. Inflows from UK domiciled investors were led by $11.3 billion into UK bonds, following inflows of $8.0 billion in the second quarter.
- Hong Kong domiciled investors reported net inflows of $167 million in 3Q 2016, following outflows of $13.2 billion in the second quarter. Third quarter inflows were led by $1.0 billion into global equities and $958 million into emerging markets fixed income.
The report highlights institutional investment asset flow trends across a wide variety of strategies, domiciles and investment vehicles. To download a full copy of the report, please click here.