The first half of 2010 has seen bigger net flows to asset-management companies worldwide than the first six months of 2009, with net flows to long-term mutual funds -- ie non-money-market products -- topping $500 billion, according to New York-based Strategic Insight.
Money-market funds in fact recorded a net outflow of $625 billion in the same period. That means the first six months of 2010 saw the total mutual-funds industry see a net $138 billion of outflows, but the trend overall demonstrates a return to risk-taking.
"Year to date, bond funds continued to be the main driver of flows," says Daniel Enskat, senior managing director and head of global consulting at Strategic Insight.
Bond funds netted $315 billion of flows, while equity and balanced funds took in another $120 billion. Alternative 'Newcits' and absolute-return funds attracted nearly $50 billion as well.
Asia-Pacific accounted for $60 billion of inflows to long-term funds and $10 billion of outflows from money markets, so the region gained a total of $50 billion of mutual-fund assets -- unlike Europe and America, where the money-market outflows eclipsed the flows to bond and equity products. In addition, international/cross-border long-term funds attracted $147 billion of inflows.
The products attracting the most flows globally were in global fixed income, emerging-market debt (particularly Asian debt) and alternative/absolute-return funds.
Worldwide, Franklin Templeton was the best-selling cross-border long-term fund manager, gathering cash flows exceeding $20 billion. The runners up were BlackRock ($14 billion), Carmignac ($11 billion), Pictet Asset Management ($9 billion) and Allianz Global Investors ($9 billion).
Templeton's success came on the back of strong performance in all the leading product types, its global brand and its strong relationships with many global distributors, says Strategic Insight. Other firms such as Carmignac and Pictet succeeded by marketing specific flagship products.
In Asia, the Japanese houses dominated, accounting for eight of the top 10 long-term funds in terms of net cash inflows.
Nomura Asset Management's global high-yield bond fund accumulated $6 billion in the first five months of 2010, while Daiwa Asset Management's Brazil bond fund and SMAM SMBC Nikko's New World Fund were other success stories. Fidelity Japan also raised $3.9 billion for its US Reit fund.
ICICI Prudential and E Fund joined the top 10 from Asia, with an Asia-Pacific bond fund and a domestic ETF respectively.
Japanese firms also enjoyed the biggest inflows of newly launched funds in Asia, notably Nomura's suite of high-yield and emerging-market bond funds.