Five giant funds investors are selling en masse

What do the flows show?

In this analysis, our sister publication Citywire Selector looks at the biggest funds currently active in the asset management industry to uncover which experienced the greatest levels of outflows over the first half of 2018.

All five fund houses were approached for comment on the back of Citywire Selector's findings. 

Note: Estimated Net Flows derived from Lipper data using monthly data points. Assets across all a fund’s share classes are included with performance stripped out.

The universe covers all active mutual fund assets Citywire has fund managers assigned to excluding US domiciled ones.



5. Templeton Global Total Return

Fund managers: Michael Hasenstab, Sonal Desai

Sector: Bonds - Global Flexible

Net outflows: €1.73 billion (£1.54 billion) 

AuM at the start of H1: €16.18 billion

AuM at the end of H1: €14.84 billion

First on the list are Franklin Templeton pair Michael Hasenstab and Sonal Desai.

Back in June of this year bond market heavyweight Michael Hasenstab said he had gradually wound down all emerging European bond exposure in his giant funds over fears about the political climate in the region.

This saw him removed US dollar-denominated Ukrainian debt, local currency Serbian bonds and local currency Polish bonds over the past 18 months.

The firm has declined to comment on the outflows when approached by Citywire Selector.



4. Carmignac Patrimoine

Fund managers: Edouard Carmignac, Rose Ouahba

Sector: Mixed Assets - Flexible EUR

Outflows: €1.98 billion

AuM at the start of H1: €21.76 billion

AuM at the end of H1: €19.47 billion

The giant fund with the fourth highest level of outflows over this period is Carmignac’s flagship Patrimoine fund. A spokesperson for Carmignac said the fund had suffered like many in the balanced funds sector, with a 10% drop in assets since the beginning of the year.

'The purpose of the fund has consistently been to pursue long term solid performance, while managing market risks to protect clients' capital. In view of current threats to the global economic cycle and US financial conditions, we continue to place a particular focus on risk management,' the firm said.

Carmignac has sought to address the outflows and underperformance. In March this year the firm gave up the plans to double the expected leverage levels of the fund.

At the quarterly meeting in January Edouard Carmignac faced up to the disappointing performance figures from last year. 'Performances were not up to your expectations and were far from mine,' he said.

He also assured that he will return to previous levels of performance: 'The disappointing performance was largely down to changes in markets but also in the company.'


3. Jupiter JGF Dynamic Bond

Fund managers: Ariel Bezalel

Sector: Bonds - Global Flexible

Net outflows: €2.67 billion

AuM at the start of H1: €10.23 billion

AuM at the end of H1: €7.98 billion

The Jupiter fund entered the year following a period of outflows, having seen net new money enter in November 2017 before outflows of €103.2 million in December, and a further €369.8 million being withdrawn in January 2018.

When approached by Citywire Selector about the outflows the firm declined to comment. However, outflows might have been connected to specific client circumstances as some decided to allocate away from fixed income or went for more risk-on option.

One contributing factor to ouflows could also have been falls in the broad government bond markets which resulted in clients hedging positions by reducing allocations.


2. Nordea 1 - Stable Return

Fund managers: Asbjørn Trolle Hansen, Claus Vorm and Kurt Kongsted

Sector: Mixed Assets - Absolute Return EUR

Outflows: €3.22 billion

AuM at the start of H1: €16.94 billion

AuM at the end of H1: €13.38 billion

Nordea declined to comment on the level of net outflows when contacted by Citywire Selector. The firm fully reopened the soft-closed strategy in May this year after a drop in assets.

Commenting on a performance dip experienced by the fund in February, the managers said it was important to understand that the market correction was not driven by deterioration of fundamentals but rather selling of the VIX positions.

Vorm, Hansen and Kongsted said the underperformance could be linked to the poor performance of low-risk equities, while drawdowns like these have happened in the past and they are well-positioned to bounce back.

‘Nevertheless, this does not change what the portfolio management team has done and will aim to do in the future. We will remain committed to our proven philosophy and process, the same one that has consistently delivered stable returns to our investors over more than 10 years,’ they added in a market commentary.


1. PIMCO GIS Income

Fund managers: Daniel Ivascyn, Alfred T. Murata

Sector: Bonds - Global Flexible

Net outflows: €3.73 billion

AuM at the start of H1: €59.36 billion

AuM at the end of H1: €55.21 billion

The hardest hit fund over the year so far is Pimco’s giant Income fund, which is overseen by two of its most well-known managers, Ivascyn and Murata. The challenges faced by the fund were flagged by Dr. Nisha Long in February of this year when €1.77 billion was withdrawn.

At that time, it was understood the change was due to the changing nature of the market, although elements of performance were also obvious. The overarching strategy remains strong and it has still grow €23.2 billion since January 2017.

In the managers’ most recent commentary, the pair said they are planning to shift towards more defensive positioning to respond to an increasingly challenging environment.