Client caution drives Pendal fund redemptions
Pendal Group’s funds under management have fallen by $13.9 billion in the June quarter due to fund redemptions driven by client caution.
Announcing to the Australian Securities Exchange (ASX), Pendal Group chief executive, Nick Good, said there had been sustained market challenges during the quarter which impacted growth-oriented funds.
Funds under management in Australia fell from $34.5 billion as of 31 March to $29.6 billion as of 30 June, 2022. This meant total Pendal FUM fell from $124.9 billion to $111 billion over the same period.
Good said: “Global equity market volatility increased dramatically with rising inflation worries, ongoing concerns over geopolitical tensions, and fears of economic recession around the world due to aggressive tightening measures by major central banks,” he said.
“This has resulted in client caution, which has driven fund redemptions, however flow trends improved in June and there was continued investment from St. James’s Place into the Global Opportunities strategy during the period. An additional $1.3 billion is expected to be funded by St. James’s Place in the September quarter.
“As a global fund manager, with differentiated style characteristics, growth-oriented funds were impacted during the period which led to an overall disappointing quarter for fund flows.”
In the US there were outflows in US pooled funds, primarily in the International Select strategy ($1.2 billion) as clients reduced their exposure to growth-oriented international equities. Thompson, Siegel & Walmsley saw outflows in its strategic advisory business, however there were positive flows into value-oriented international equities and multi-asset strategies for the second consecutive quarter.
In Australia, institutional outflows were primarily in fixed income ($1.3 billion) which included the closure of the Alternative Duration strategy during the quarter. Despite volatile markets during the period, there were positive flows in the wholesale channel with Australian equities and fixed income in net inflow.
“As a result of current market conditions, we remain prudent and flexible in managing costs, focusing on building and strengthening our strategic growth areas. These include the development and expansion of our global distribution capability, the streamlining of the group’s global operating platform and adapting our product offerings to ensure ongoing and future relevance to our clients,” Good said.
AUTHOR
Liam Cormican
Recommended for you
Clime Investment Management has welcomed an independent director to its board, which follows a series of recent appointments at the company.
Ethical investment manager Australian Ethical has cited the ongoing challenging market environment for its modest decrease in assets over the latest quarter.
Commentators have said Australian fund managers are less knowledgeable compared with overseas peers when it comes to expanding their range with ETFs and underestimating the competition from passive strategies.
VanEck is to list two ETFs on the ASX next week, one investing in residential mortgage-backed securities and the other in Indian companies.
