aberdeen inflows still show heavy reliance

Aberdeen Asset Management saw AUM grow £14.8bn in the six months to the end of March, as a strong showing from its equity products mitigated weaker appetite for its fixed income and multi-asset offerings.

aberdeen inflows still show heavy reliance
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Overall the firm posted small net outflows of £400m for the period, compared to outflows of £700m in the same six-month period last year.

The firm’s equity funds put in a good performance, attracting net new business flows of £4.9bn during the period, while market appreciation and currency moves contributed a further £12bn increase to equity AUM.

Meanwhile, its fixed income, property, money market and multi-asset businesses all saw outflows in the six months to the end of March.
In total AUM grew to £184.7bn from £181.2bn a year earlier and witnessed a 9% growth in the past six months.

The firm said its global emerging, global and Asia Pacific equities products had represented a major element of these inflows, but added its emerging market debt and Asia Pacific fixed income products had also seen healthy interest.

Roger Cornick, Chairman of the company, said: "Demand for our mainstream GEM equity product has continued to be extremely strong and we have continued our efforts to moderate the rate of inflows into these funds.

"While the strong demand is clearly an endorsement of the integrity of the franchise built over the years, we are not prepared to compromise the quality of the portfolios by diversifying into stocks of lesser quality. To do otherwise would not be in the best interests of existing clients.

"It is pleasing, however, to see growing interest in our Latin America and other regional emerging markets capabilities, which are less capacity-constrained."

GEM restrictions

Aberdeen first wrote to investors in February to "seek cooperation" in limiting flows into the GEM strategy to prevent performance suffering due to illiquidity.

The letter, sent to significant investors in the fund, said the measures introduced over the past few years to slow flows had not done so sufficiently and so it was exploring the possibility of closing its pooled funds to new business.

In the meantime it has asked larger investors, including names such as Hargreaves Lansdown and Chelsea Financial Services to cease promoting the GEM equity funds and to remove them from their buy and recommended lists.

These measures were due to be implemented at the start of April and a spokesperson for Aberdeen said they had started to make an impact.

He added that in the long term the firm’s ideal target is to have controlled inflows of £2bn to £3bn per annum into the strategy.

For more, read our analysis of alternatives to Aberdeen in GEM.

 

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