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Rating:Two-Thirds of 2020 Outflows Came From Midsize Firms Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, July 17, 2020

Two-Thirds of 2020 Outflows Came From Midsize Firms

Reported by Neil Anderson, Managing Editor

Two-third of net industry outflows in the first half of 2020 came from midsize fund firms.

Michael Lynn Sapir
ProFunds, ProShares
Chairman, CEO
This article draws from Morningstar Direct on June 2020 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. More specifically, this article focuses on the 75 fund firms with between $10 billion and $100 billion each in long-term MF and ETF AUM. 38 of those firms gained net June inflows (up from 33 in May), 39 gained gained net inflows in the second quarter (up from 10 in Q1), and only 23 gained net inflows in the first half of 2020.

ProShares and ProFunds led the midsize pack in the first half of the year, with an estimated $10.793 billion in net inflows. Other big inflows winners in the first half of 2020 included: Rafferty's Direxion, $7.796 billion; Edward Jones' Bridge Builder, $6.232 billion; First Trust, $5.402 billion; and Baird, $5.189 billion.

Proportionately, Direxion led the midsize fund firm pack in the first half of 2020, with estimated net inflows equivalent to 46 percent of its AUM. Other big inflows winners in the first half of the year included: ProShares, 25.6 percent; WCM, 22.5 percent; Mirae (including Global X), 10.1%; and Edgewood, 9.2 percent.

In the second quarter, Morgan Stanley led the midsize pack thanks to an estimated $7.517 billion in net Q2 inflows, up from $7.61 billion in net Q1 outflows. Other big Q2 inflows winners included: Bridge Builder, $7.19 billion (up from $958 million in net outflows); ProShares, $5.557 billion (up from $5.236 billion); Baird, $4.719 billion (up from $470 million0; and First Trust, $4.7 billion (up from $702 million).

Proportionately, Direxion led the midsize pack last quarter, thanks to estimated net Q2 inflows equivalent to 18.2 percent of its AUM, down from 45.4 percent in net Q1 inflows. Other big Q2 inflows winners included: ProShares, 13.2 percent (down from 15.9 percent); Morgan Stanley, 12.2 percent (up from 17.4 percent in net outflows); WCM, 12.2 percent (down from 14.9 percent); and Guggenheim, 10.5 percent (up from 10.6 percent in net outflows).

Bridge Builder led the way last month, thanks to an estimated $3.936 billion in net June inflows, down from $4.001 billion in May. Other big June inflows winners included: Morgan Stanley, $2.97 billion (down from $2.977 billion); First Trust, $1.759 billion (up from $1.401 billion); Baird, $1.759 billion (up from $2.237 billion); and Cohen & Steers, $1.342 billion (up from $103 million in net outflows).

Proportionately, Direxion led the midsize pack last month, thanks to estimated net June inflows equivalent to 6 percent of its AUM, up from 1.7 percent in May. Other big June inflows winners included: Cohen & Steers, 5 percent (up from 0.4 percent in net outflows); Morgan Stanley, 4.8 percent (down from 5.3 percent); Bridge Builder, 4.5 percent (down from 4.9 percent); and Mirae, 4.4 percent (up from 3.3 percent).

On the flip, 2020 has been rough so far for Harris' Oakmark, which suffered an estimated $9.62 billion in net outflows in the first half of the year, more than any other midsize fund firm. Other big outflows sufferers in the first half of 2020 included: DoubleLine, $9.588 billion; First Eagle, $6.084 billion; Primecap, $5.747 billion; and Victory, $5.012 billion.

Proportionately, UBS led the midsize pack in the first half of the year, suffering estimated net outflows equivalent to 27.9 percent of its AUM. Other big outflows sufferers in the first half of 2020 included: Primeca, 22.4 percent; Oakmark, 19.7 percent; Matthews Asia, 18.3 percent; and AQR, 15.2 percent.

Oakmark led the midsize pack last quarter, thanks to an estimated $4.994 billion in net Q2 outflows, up from $4.626 billion in Q1. Other big Q2 outflows sufferers included: DoubleLine, $4.222 billion (down from $5.366 billion); Primecap, $3.326 billion (up from $2.42 billion); First Eagle, $2.868 billion (down from $3.216 billion); and Victory, $2.657 billion (up from $2.355 billion).

Proportionately, UBS led the midsize pack last quarter, thanks to estimated net Q2 outflows equivalent to 22.4 percent of its AUM, up from 5.2 percent in Q1. Other big Q2 outflows sufferers included: Primecap, 13 percent (up from 10.2 percent); Oakmark, 10.2 percent (down from 10.5 percent); Lazard, 8 percent (up from 0.5 percent); and Matthews Asia, 7.6 percent (down from 12 percent).

Oakmark also had a rough June, suffering an estimated $1.273 billion in net outflows, more than any other midsize fund firm but down from $1.404 billion in May. Other big June outflows sufferers included: Lazard, $975 million (up from $478 million); Victory, $933 million (down from $1.027 billion); DoubleLine, $711 million 9down from $1.018 billion); and First Eagle, $685 million (down from $777 million).

Proportionately, Lazard led the midsize pack last month with estimated net June outflows equivalent to 4.4 percent of its AUM, up from 2.1 percent in May. Other big June outflows sufferers included: Oakmark, 2.6 percent (down from 2.9 percent); Primecap, 2.5 percent (down from 5.5 percent); Mercer, 2.3 percent (up from 0.2 percent); and GMO, 2.2 percent (up from 0.8 percent).

As a group, the 75 midsize fund firms suffered an estimated $68.052 billion in net outflows in the first half of 2020, equivalent to 2.43 percent of their combined AUM and accounting for 67.4 percent of net industry outflows. Yet in Q2, the midsize fund firms brought in an estimated $15.426 billion in net inflows (up from $88.294 billion in net Q1 outflows), equivalent to 0.55 percent of their combined AUM (up from 3.56 percent in net outflows) and 12.7 percent of net industry inflows (up from 39.45 percent of net outflows).

In June alone, midsize fund firms brought in an estimated $11.93 billion in net inflows, up from $4.584 billion in May. Those June inflows were equivalent to 0.43 percent of their combined AUM (up from 0.17 percent in May) and accounted for 17.09 percent of net industry inflows in June (up from 13.89 percent in May).

Across the entire industry, the 758 fund firms (down from 763 in May) tracked by the M* team suffered an estimated $100.974 billion in net outflows in the first half of 2020, equivalent to 0.51 percent of their combined AUM. Yet in Q2 the industry brought in an estimated $121.511 billion in net inflows, equivalent to 0.61 percent of industry AUM. That's up from $223.83 billion in net Q1 inflows, equivalent to 1.31 percent of net inflows.

In June alone, the industry brought in an estimated $69.822 billion in net inflows, equivalent to 0.35 percent of industry AUM (up from $33.001 billion and 0.17 percent in May). Active funds brought in an estimated $28.617 billion in net June inflows, while passive funds brought in an estimated $41.295 billion. 

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