Welcome to Fund Radar

The survey covers opinion for the six month period to March 2013 and shows over 50% of fund distributors interviewed declaring that they were either optimistic or very optimistic about the outlook for the fund industry over the next 12 months. A fairly chunky proportion were unwilling to commit to a positive or negative opinion so we should not get too excited. However, the tiny proportion in the pessimistic bucket was promising, particularly when compared with the preceding six month period.

What a difference six months makes

Between March and September 2012, fund selectors had a much more gloomy view of the world; 35% of respondents sat on the fence in neutral position, whilst optimists accounted for just 23%. The pessimistic lobby, on the other hand, were in the majority with 42% of the vote.

Amongst the most bullish were fund selectors from Belgium and Luxembourg where 68% expressed themselves to be positive. French selectors followed with a 61% positive vote, followed by the Netherlands, Sweden and the UK. Interestingly it was the Germans that were the most reluctant to see the green shoots of recovery. In Germany only 40% of selectors polled were positive and 24% were firmly negative.

Sales support – best practice

Amongst the many areas in which a fund group can differentiate itself, client service can be one of the most elusive and difficult to measure. Those groups that succeed tend not to be congratulated because …

There were plenty of headwinds for investors to struggle past in March but, having waited on the sidelines for so long, they gritted their teeth and maintained their commitment to the markets. Cyprus was their biggest test of nerves with Eurozone politicians playing a game of brinkmanship before finally reaching a deal that will cripple the Cypriot economy but leave the Eurozone intact. For investors in wider Europe Cyprus raised another red flag of uncertainty, but belief in the commitment of politicians to do 'whatever it takes' ensured a muted response and by the end of the month European bourses were up, albeit by a measly 0.6%.

Elsewhere, opinion was much more bullish. The US reference markets began to hit all-time highs and the Nikkei posted a growth spurt of over 7%, and this was before the Bank of Japan launched its aggressive new quantitative easing programme. All well and good but the perennial emerging market favourites remained under water.

Against this background we might have expected to see some softening of support for emerging markets, another backlash against European-focussed products, a push into US stock funds and/or the dollar, and Japan.

In fact all these issues featured in the pan-European sales flow data although the moves were sometimes subtle and generally drowned out by a sharper focus on other sectors that have been capturing the attention of retail investors. In summary:

• Emerging market products stayed in vogue. The generic bond …

Another good month but momentum slows

Fund sales were solid at €29.6bn for long-term funds, but there were signs of investors moving back to their risk-on positions, and a comparison with Morningstar February data shows a third month of sales slippage.

Markets cautious as Cyprus issue explodes

This was an understandable response to stock markets that struggled to stay positive against the Cyprus bank debt backdrop, and in the wake of the inconclusive Italian election.

Bond funds, again, take the high ground

In a clear indication that investors, whilst flirting with equities, remain some way off the much-discussed bond-to-equity rotation. At €14bn, fixed income was on the rise again but remained distant from its recent highs.

Meanwhile equities stuttered

Net sales volumes of €4bn were modest. This was the sector's lowest point since November last year and suggests caution is once again stalking the retail streets.

What of retail investor recovery?

There was still some evidence of latecomers heading into funds. The strength of the large brands at the top of the sales ranking tables indicates continuation of bank platform involvement.

But, institutions and Asian investors were also in evidence

High yield bond funds came back to form after a brief period of quiet. US Dollar products, much favoured by Asian investors, saw volumes close to those of last year's high points.