Lyxor and State Street Global Advisors among worst performers so far in 2019
Chris Flood
Société Générale declined to say how many jobs it would cut at poorly performing Lyxor (Charles Platiau/Reuters)
This year’s battle between providers of exchange traded funds to drum up new business has made an anaemic start with worldwide investor inflows down more than a quarter in the first three months.
The weaker growth from almost all ETF managers comes in spite of a 13 per cent first-quarter rally for the S&P 500, the US equity benchmark, and strong gains across other equity markets globally.
Investors ploughed $99.1bn into ETFs (funds and products) in the first three months, down 28 per cent on the $136.8bn registered in last year’s first quarter, according to preliminary data from ETFGI, the London consultancy.
Lyxor, the Paris-based asset manager, reported the weakest quarterly performance with outflows of $3.1bn. It followed a disappointing 2018 performance for Lyxor’s ETF business when it gathered just $2.7bn over the whole of last year.
Arnaud Llinas, head of Lyxor’s ETF business, said there were “significant outflows” from EuroStoxx 50 ETFs as well as individual country funds tracking stock markets in France, Italy and Spain.
Jobs will be cut this year at Lyxor after its parent Société Générale said it would reduce staff numbers by 1,600 as part of a plan to cut costs by €500m. Société Générale declined to disclose how many jobs would be cut at Lyxor.
State Street, the third-largest ETF provider globally, also made a weak start with net outflows of $1.8bn while China Asset Management registered $1.9bn in ETF withdrawals.
New business for BlackRock’s iShares division, the world’s largest ETF manager, dropped 13 per cent to $29.3bn.
Pennsylvania-based Vanguard, the nearest rival to BlackRock, attracted ETF inflows of $19.2bn, a decline of 19.2 per cent.
The unexpected shift in monetary policy by the US Federal Reserve, which signalled last month that it would refrain from raising interest rates for the rest of the year, stimulated inflows into ETFs linked to fixed-income markets. Bond ETFs gathered record inflows of $56.4bn in the first quarter, more than double the same period last year and taking assets in fixed-income ETFs closer to the $1tn milestone.
Matthew Bartolini, head of Americas research at State Street Global Advisors, said the interest rate shift by the Fed and other central banks should further support risk assets such as equities and high-yield bonds.
“Just don’t expect the pace of gains [seen in the first quarter] to continue this late into the cycle,” he said.
Bank of America Merrill Lynch said investor optimism appeared to be improving with clients rotating out of single stocks into ETFs for a fourth consecutive week ending April 1.
The consensus forecast among Wall Street analysts is for earnings growth for the S&P 500 to slow to 3.5 per cent in 2019 from about 21 per cent last year due to weaker US growth and trade tension between Washington and Beijing.
Savita Subramanian, head of US equity and quantitative strategy at BofA, said the outcome of the trade negotiations with China was “the key factor” for US earnings in 2019.
She said that a “real trade deal” could boost S&P 500 earnings by about 1 percentage point in 2019. A full-blown trade war involving higher tariffs on $200bn of US exports to China would reduce S&P 500 earnings by a similar amount in 2019.
0 comments:
Publicar un comentario