Mon, Apr. 11, 4:24 PM
- IVZ March 31 total AUM of $771.5B rises from $737.5B a month earlier, with market gains, favorable fx, and inflows all contributing.
- Active AUM of $640.4B vs. $612.5B. Passive AUM of $131.1B vs. $125B.
- Source: Press Release
- Now read: Invesco Is Crushing Barclays And WisdomTree In Currency ETF Space
Thu, Apr. 7, 4:18 PM
- Pimco's Total Return Fund has made headlines for months over the fast pace of investor money exiting - a full $35B through the year ended February - but in percentage terms, writes Russel Kinnel, it places just 49% on the list of 12-month outflows from the Morningstar 500.
- Eighteen of the 500 posted outflows of at least 40% of assets, with 61% suffering 25% of more of exits, and 168 with 10% or more.
- If we were coming out a bad bear market, these sorts of redemptions would be expected, says Kinnel, but, in fact, they've occurred after a monster rally. Flowmageddon indeed.
- The simple answer: Low-cost ETFs have, for now, won the debate over active/passive, and even over index funds which offer similar cheap prices.
- Among the active managers monitoring: BEN, LM, JNS, IVZ, AB, AMG, FII, WDR, APAM, MN
Mon, Apr. 4, 3:24 PM
- Just 19% of large-cap U.S. stock funds topped the S&P 500 in Q1, according to BAML's Savita Subramanian. It's the worst performance on that metric since the data started being tracked in 1998.
- The average large-cap fund trailed the S&P by 190 basis points, "a record spread of underperformance."
- It was the March rally that helped do managers in, says Subramanian, noting one-third of them beat the market in January, and 27% in February.
- "The lit match taken to active returns last quarter was likely the massive reversal – by the market, by sectors, by styles and by stocks – occurring within the quarter ... Crowded positions proved particularly damning in the Q1, with the 10 most crowded stocks underperforming the 10 most neglected stocks by almost 7 percentage points, an atypically high spread.”
- It's another rough session for traditional asset managers today: Franklin Resources (BEN -1.8%), Legg Mason (LM -4.1%), Gamco (GBL -1.3%), Janus (JNS -1.6%), Invesco (IVZ -1.1%), Affiliated Managers (AMG -2.2%), Waddell & Reed (WDR -3.3%)
- Now read: It's Official: The Good Times Are Over (April 4)
Mon, Mar. 14, 11:03 AM
- While February trends were mixed, says Citigroup's William Katz, they did improve on a month-to-month basis, particularly for active funds. Though ETFs continue to gain market share, some equity funds were hit with sizable outflows.
- Affiliated Managers Group (AMG -2.5%) saw 28% annualized organic growth in February, says Katz, with AllianceBernstein (AB +0.8%), 26% growth, Federated Investors (FII -1.2%), 8% growth, BlackRock (BLK -1%), 5% growth, Schwab (SCHW -1.6%), 4% growth, T. Rowe Price (TROW -1.2%), 3% growth also posting solid long-term inflows.
- Vanguard had a solid month, with 9% growth.
- Meanwhile WisdomTree (WETF -1.5%) at 50%, Waddell & Reed (WDR +1.9%) at 37%, Invesco (IVZ -0.8%) at 11%, and Franklin Resources (BEN -0.9%) at 10% all saw deeply negative annualized loss rates.
- Katz reiterates Buy ratings on AB, Legg Mason (LM -2.1%), and OM Asset Management (OMAM -2.2%), but still sees "outsized downside" for WisdomTree and Waddell & Reed.
Fri, Mar. 11, 8:34 AM
- The analyst team lead by Brian Bedell is altering its valuation methodology for private-equity players from multiples of distributable earnings to a sum-of-the-parts model. The "volatile backdrop" makes one-two year distributable earnings estimates "highly uncertain," they say.
- Thanks to its higher sensitivity to real estate than peers, Blackstone (NYSE:BX) is cut to Hold from Buy.
- Within the subsector, Bedell and team like in order: Exchanges, online brokers, large-cap asset managers, trust banks, and at the end of list alternative asset managers (private-equity).
- Their top pick in exchanges is CME Group (NASDAQ:CME), thanks to its leverage to uncertainty on global rate policy, economic growth, oil, and equity markets.
- In online brokerage, Schwab (NYSE:SCHW) is a "solid play" on more Fed tightening.
- In custodial names, the team continues to like a pair trade of long BNY Mellon (NYSE:BK) and short State Street (NYSE:STT).
- For traditional asset managers, Affiliated Managers (NYSE:AMG) is especially undervalued, followed by Invesco (NYSE:IVZ), BlackRock (NYSE:BLK), and T.Rowe Price (NASDAQ:TROW).
- In alternatives, Oaktree (NYSE:OAK) is best-positioned thanks to its ability to put money to work in distressed credit opportunities.
Wed, Mar. 2, 10:38 AM
- According to Thompson Reuters, investors yanked more than $60B from mutual funds globally during January, the worst month outflows since September 2008. European funds fared the worst, with $47B of net outflows.
- The exits came, of course, as stock markets suffered their worst January in at least 20 years.
- Source: FT
- It's more bad news for asset managers like - Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), Invesco (NYSE:IVZ), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG) and Federated Investors (NYSE:FII) - but on the good side, the redemptions were met without any notable issues.
- “Fundamentally, the outlook is quite negative for the asset management industry in 2016," says Citi's Haley Tam.
Thu, Jan. 28, 7:30 AM
- Invesco (NYSE:IVZ): Q4 EPS of $0.58 misses by $0.02.
- Revenue of $886.1M (-2.2% Y/Y) in-line.
Wed, Jan. 27, 5:30 PM
- ABT, ACAT, ADS, AEP, AIT, AN, ARG, AUO, AVT, BABA, BANC, BC, BHI, BLL, BMS, BMY, BOFI, BX, CAT, CELG, CHKP, CLFD, CRR, CSH, CY, DGX, DLX, DST, EPD, EXTR, F, FCFS, FCS, FLWS, GLOP, GNTX, HAR, HCA, HGG, HOG, HP, HSY, HUBB, INGR, IVZ, JBLU, JCI, KEM, LEA, LLL, LLY, LRN, MITK, MJN, MKC, MMYT, MO, MTH, NDAQ, NEE, NOC, NTCT, NUE, ORI, OSK, PHM, POT, RDN, RGS, RTN, SHW, SWK, SXC, TCB, TGI, TMO, TROW, TWC, UA, UBSI, VLO, WCC, WRLD, XEL, ZBH
Wed, Jan. 27, 9:23 AM
- Executives at Goldman Sachs gasped at a meeting last fall when the bank's asset management unit presented to them a new ETF with annual fees of just 0.09%.
- Story from the WSJ's Jason Zweig and Sarah Krouse
- It's not just the booming ETF industry where price wars abound, but mutual funds are getting less costly as well. The average fund tracked by Morningstar charges 1.07%, down from 1.22% in 2005.
- It's not all bad for mutual fund providers, who say they offer bargain prices on some products as "loss leaders" to get investors in the door where they can then be pitched more expensive funds and strategies. Still fund industry profit margins are slipping - 22% in Q3 from 25% a year earlier, according to DST Kasina.
- Industry comments: "We’re not surprised at all to see passive managers compete on fees because that’s their only differentiator,” says AlianceBernstein's (NYSE:AB) Chris Thompson, whose company has boosted marketing efforts for its actively-managed strategies.
- "We are in the business of increasing earnings,” says BlackRock's (NYSE:BLK) Mark Wiedman, whose firm's total stock market ETF now charges a barely-visible 0.03%. “Over time, the revenue growth from volume will outstrip the price cuts in these products.”
- Other interested parties: BEN, LM, GBL, JNS, IVZ, TROW, AMG, FII
Wed, Jan. 13, 11:53 AM
- Investors pulled $207.3B from active funds in 2015, according to Morningstar. It was the first net outflow since 2008. Interestingly, actively managed mutual funds in 2015 outperformed passive funds for the first time since 2012 (though both were in the red).
- At the same time investors pulled those billions from active funds, $413.8B poured into passively-managed funds, including Vanguard which pulled in a record $236B.
- The action will come as little surprise to those who have been following the shift toward passive funds and ETFs.
- Interested parties include AllianceBernstein (AB -2.8%), Franklin Resource (BEN -0.3%), Legg Mason (LM -3.7%), Janus Capital (JNS -3.5%), Invesco (IVZ -1.3%), Affiliated Managers (AMG -1.8%), Federated Investors (FII -1.5%)
Tue, Jan. 12, 4:43 PM
- IVZ Dec. 31 total AUM of $775.6B slips from $791.1B a month earlier.
- Equity AUM of $370.9B falls from $380B. Active equity AUM of $279.9B vs. $287.8B. Passive equity AUM of $91B vs. $92.2B.
- Fixed-income AUM of $187.9B vs. $189.6B. Fixed-income active AUM of $149.3B vs. $149.8B. Fixed-income passive AUM of $38.6B vs. $39.8B.
Wed, Jan. 6, 11:58 AM
- in the latest sign of the move out of active investing, a record $236B poured into indexing-pioneer Vanguard last year, exceeding the $215.5B of inflows in 2014.
- AUM at Vanguard rose to more than $3.1T. Investors pay under $0.18 per $100 invested in Vanguard products versus $1.23 for the average actively managed one (and $0.89 for average passive fund).
- In the first 11 months of 2015 according to Morningstar, passively managed stock and bond funds saw $361.8B of inflows, and actively managed ones $139.5B of outflows.
- Interested parties: BLK, WETF, BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM.
Dec. 20, 2015, 8:30 AM
- The bear case - the ongoing shift to passive investing via ETFs and Vanguard - is well known, but investors are overlooking favorable industry characteristics like modest capital requirements, high profit margins, and strong cash returns to shareholders, writes Andrew Bary. Compensation levels remains generous as well, meaning there's plenty of room to cut expenses.
- Stocks of the biggest players like BlackRock (NYSE:BLK), Invesco (NYSE:IVZ), Franklin Resources (NYSE:BEN), and T. Rowe Price (NASDAQ:TROW) trade at a below-market 11-15x projected EPS and sport sizable dividend yields.
- The sell-side generally isn't very bullish on the industry, but JPMorgan's Ken Worthington thinks a value approach - a focus on capital returns and efficiencies - could trump analysis of sales growth. His favorite is BlackRock (which also has a sizable ETF business) - it's seen the best inflows outside of Vanguard.
- Others to consider include Affiliated Managers Group (NYSE:AMG) which has the distinctive approach of buying stakes in private investment firms, and giving the firms' managers autonomy. Particularly stung by the Third Avenue debacle, Affiliated trades for less than 12x estimated 2016 earnings which could be about to get a lift from three accretive acquisitions made last month. Eaton Vance (NYSE:EV) and Janus Capital (NYSE:JNS) make the list as well.
Dec. 16, 2015, 12:18 PM
- Actively-managed U.S. equity funds saw their sixth-worst monthly outflow in November since Morningstar began tracking the data in 1993. In total, $19.7B was pulled from equity mutual funds last month, bringing the year's total to $163B. ETFs saw inflows of $13B, meaning net equity outflows of $6.7B.
- Still a hot sector is international equity, which saw net inflows of $4.9B - active fund outflows of $4.2B and passive inflows of $9.2B. For the year, international equity has seen inflows of $208B, while U.S. equity outflows are $56B.
- Among the mutual fund companies continuing to see outflows are Pimco (OTCQX:AZSEY +0.6%), Franklin (BEN -0.3%), Fidelity, and JPMorgan (JPM +0.4%). On the ETF side, BlackRock (BLK -1.2%) and Vanguard took in $27.2B between them.
- Other interested parties: WisdomTree (WETF -0.4%), Invesco (IVZ), Legg Mason (LM +1.1%), Janus (JNS -0.6%), T. Rowe Price (TROW +0.1%), AllinaceBernstein (AB +1.4%), Affiliated Managers (AMG +1.2%), Federated Investors (FII +0.7%), Waddell & Reed (WDR -0.3%).
- Full report
Dec. 14, 2015, 2:44 PM
- Equal-weighted organic growth slid to negative 11% in November from negative 4% a month earlier, according to Wells Fargo, noting only three of 11 asset management firms in its coverage universe saw positive flows.
- Mutual fund equity outflows "worsened substantially" last month, while fixed-income flows again turned negative. In no surprise, ETF inflows were a bright spot - $25B, or 14% organic growth.
- Turning to individual names, BlackRock (NYSE:BLK) - thanks to strong inflows at its ETF unit - was a relative outperformer. Invesco (NYSE:IVZ) was as well, though mutual fund flows remained negative.
- Underperformers: Franklin Resources (NYSE:BEN) and Janus Capital (NYSE:JNS). Net outflows have now been negative for the past 14 months at BEN and for the last seven months at Janus.
Dec. 2, 2015, 12:05 PM
- So far this year, Vanguard is leading the way as a record $365B flows into low-cost, passively-managed index funds and ETFs, while actively-managed mutual funds have lost $147B, reports Bloomberg. That roughly $500B swing at roughly 50 basis points (the difference between active and passive fees) means $25B less going to the financial services industry.
- That $25B compares to about $200B per year globally in trading and asset management revenue, but there's also the "hidden fees" active managers rack up from continuously buying and selling - on average active mutual fund managers turn over portfolios at 10x the pace of a Vanguard index fund.
- But that's not all ... It took Vanguard 32 years to reach $1T in assets, eight to get to $2T, and just three to get to $3T. Vanguard alone could be removing $40B in revenue from the financial industry by 2020. There's also the "Vanguard Effect" in which other funds lower fees to try and compete with the giant's Wal-Mart-like "everyday low prices."
- The good news for active managers: As ETFs (passive-investing) proliferate (they now account for 30% of total assets), it should give sharp managers a little more room to actually create some alpha.
- Interested parties: BlackRock (NYSE:BLK), WisdomTree (NASDAQ:WETF), Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), Invesco (NYSE:IVZ), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG), Federated Investors (NYSE:FII), Waddell & Reed (NYSE:WDR), Artisan Partners (NYSE:APAM), Cohen & Steers (NYSE:CNS), Manning and Napier (NYSE:MN), Virtus Investment (NASDAQ:VRTS), Eaton Vance (NYSE:EV)
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