The same research house that slammed smart beta ETFs earlier this year for being too expensive compared to plain vanilla index trackers has now found that the former are gaining market share, while fees are being reduced.
The popularity of bond funds was reinforced by the Brexit vote. While all fixed income asset classes saw net inflows, investors especially flocked to emerging market debt in July, according to fund flows data from Morningstar.
European equity funds experienced their largest ever monthly net outflows in July, beating the previous record set in January 2008, according to Morningstar fund flows data.
The average net expense ratios of European-domiciled funds have come down across the board since 2013, according to a study by Morningstar.
If fund flows are a reliable sentiment gauge, investors were at their most bearish since the autumn of 2011 on the eve of the Brexit vote. And the referendum outcome has only exacerbated this trend.
European investors are sitting on large cash piles, and are waiting for volatility to ease a bit before hunting for opportunities.
The five European equity funds that managed to finish top-quartile for the past three consecutive years do not have a great deal in common. But there’s one feature they (almost) all share.
New research by Morningstar challenges assumptions about the threat ETFs pose to the stability of high yield markets, especially during times of crisis.
European investors have been selling out of equities this year and have piled into credit instead. Net monthly inflows into corporate bond funds and ETFs reached an all-time record in April, according to Morningstar data.
A poll conducted by Expert Investor last year among more than 60 European fund selectors showed that active share is an important fund selection metric for more than 80% of them. However, very few fund houses regularly update investors about the active share of their funds. Should they be more open?
Short-term fund flows are known for their capricious nature. And recent months have shown that rule still holds. While flows into European equity funds were close to record highs in autumn last year, they have since edged deeply into negative territory.
As soon as a fund’s portfolio reaches 40 stocks, the benefits of portfolio diversification diminish. Therefore, fund managers should strive to have no more than 40 holdings. That’s the conclusion of a study conducted by Nomura Asset Management.
