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UBS Asset Management was Europe’s worst-selling fund house in April, in a sign that the firm faces an uneven recovery as it seeks to turn around its fortunes following the acquisition of Credit Suisse.
Switzerland’s largest asset manager suffered net outflows of €3.6bn in April, having had redemptions of €430mn in March, according to Morningstar data that excludes money market and funds of funds.
“Large mergers end up with a longer than anticipated integration period due to organisational complexity,” said Amin Rajan, chief executive of asset management consultancy Create-Research.
“In asset management, organisational stability is vital during the transition phase, otherwise clients tend to walk away with their money,” he added.
This article was previously published by Ignites Europe, a title owned by the FT Group.
According to a person close to UBS, the firm expects to see fluctuations in flows as it integrates Credit Suisse’s products.
The firm’s fund flows in April were “within the normal range” for products of their size, the person added.
Valerio Baselli, investment specialist at Morningstar, said some of the flows reflected top-down asset allocation shifts in UBS’s wealth management channels, “which regularly see large shifts between asset classes and have repeatedly made a noticeable imprint on European fund flows”.
UBS AM and the former Credit Suisse Asset Management business together garnered net inflows to their European funds of €7.9bn between December 2023 and February 2024, suggesting a recovery was under way for the combined business.
Since the completion of the Credit Suisse acquisition in June last year, UBS has been working on its transition plan to bring together the two managers’ fund ranges, including liquidating funds that will not be included in the firm’s product range.
But inflows to the combined European fund range began to slow last month and have worsened in April, Morningstar data shows.
As separate entities, UBS suffered outflows of €1.6bn in April, while Credit Suisse had outflows of €2bn.
Cumulative net flows for the Swiss fund house remain positive over the year to date, however, with UBS garnering inflows of €8.4bn and Credit Suisse having net outflows of €5.8bn over the first four months of the year.
In April, most of UBS’s outflows related to passive products, totalling €2.6bn, despite the wider shift towards passive investments in the industry.
By contrast, BlackRock was the best-selling firm in April with €8.5bn of inflows. Some €8.2bn of these sales related to passive funds, including exchange traded funds.
Vanguard and State Street were the second and third best-selling firms, with €4.8bn and €2.2bn of inflows respectively, the lion’s share of which also related to passive funds.
Next to UBS, Eurizon was the second-worst selling firm, experiencing outflows of €2.6bn, mostly from its mixed asset funds.
Eurizon did not respond to a request to comment.
Overall, European mutual funds and ETFs received inflows of €11.5bn in April, with €13.4bn moving into passive funds, while €1.9bn flowed out of actively managed funds.
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Precious metals commodity funds were the fund category that suffered the largest outflows in April, totalling €4bn.
Invesco was hardest hit, with outflows of €660mn from its gold exchange traded commodity product, although Amundi, iShares and DWS’s gold ETCs also suffered outflows of more than €350mn each.
Baselli said investors in physical gold ETCs “did not hesitate to take massive profits” when the spot price of gold “hit an all-time high” in April.
Fixed income funds continued as the best-selling asset class, attracting net inflows of €25.5bn.
Multi-asset funds experienced the largest outflows, totalling €6.1bn, while equity funds had outflows of €1.9bn.
*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.
