Lipper: Inflows every year for past decade in UK
The UK is the only major European fund industry to have enjoyed overall positive inflows in each year of the past decade, research by Lipper has revealed.
Among the UK, cross border and domestic Europe fund industries, the UK is the only one which has consistently attracted inflows, even during the early years of the financial crisis.
“While all three segments generally fared well in the early years of this period, from 2006 groups with domestic European offerings - although here too there will be variations - saw sales hit most hard. By contrast, cross-border groups, albeit far from immune from the crisis, recovered strongly in the succeeding two years,” according to the report.
However, the diversity of fund inflows has shrunk in the uncertain environment generated by the crisis. Research found that, in 2011, nearly 50% of inflows were accounted for by just over 145 of the 6,536 available bond funds.
In addition to this, fund manager costs have reduced returns by 27.9% over the past ten years. For actively managed equity funds domiciled in the UK, the average fund returned 71.2%, while the average fund manager returned 98.7%, before the total expense ratio is taken into account.
Ed Moisson, head of UK and cross-border research at Lipper, says: “This analysis suggests that fund companies care about clients as far as it makes business sense to do so. To do otherwise would be to make business decisions from a moral perspective – or for fiduciary responsibility to be extended to include fund fees. But fee levels cannot be viewed in isolation and one must also consider the challenges that fund management businesses face.”
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