Editor’s View

The lacklustre sales trends that marked the start to 2019 have continued into February, which proved to be another pretty dull month for funds. A rise in long-term net sales to €10bn – aided in no small part by a move by UK local governments (LF ACCESS) to convert pension assets into a series of new sub-advised funds – could not disguise the fact that underlying trends are negative for the industry. Investors are exhibiting a distinctly risk-off approach, and once again we are seeing that active managers are suffering the most, with bond funds alone credited with keeping the active flame burning so far this year. February also demonstrated the critical role played by ETFs in fund sales activity. In this edition of Second Sight we shine the spotlight on this bastion of passive investment, which is punching well above its weight in terms of net flows, and represents the majority (78%) of third-party fund selectors’ passive AUM in Europe.

Finally, the ‘B’ word… the seemingly endless Brexit debacle rolls painfully on and continues to dampen both the pace of fund demand and positive sentiment generally.