A month of deeper outflows in September underscored 2018’s tough conditions for net fund sales. October looks set to have given sentiment another shake, and we have revised down the full-year sales forecast accordingly. Nevertheless, rotational activity is very much alive and well (see European trends) – opportunities still abound for well-positioned asset managers.
Another surprising feature of business this year is the relative weakness of active fund flows despite the uptick in market volatility, which ought to encourage the hunt for alpha. But some groups buck the trend: Fundsmith has grown its equity fund to be the largest in Europe (see Product development), in no small part due to its no-nonsense marketing and communications. Merian Global Investors, the new name for Old Mutual GI, is setting out its stall as a unique, high-conviction manager too (see Competitor oversight). But both will need to surmount weakness in their UK home market, where Brexit worries take flows ever further into the red, and cross-border groups based there need to decide quickly how they are going to distribute their funds in the event of a messy divorce (see Regulatory overview). Mark McFee