Hendersons other key 2015 themes

According to Phil Wagstaff, global head of distribution at Henderson, there is an increasing demand for income-generating products, whether in the form of corporate bond funds or equity income products, that has resulted from low returns on cash saving and the shifting demographic trends globally.
This comes in the context of increasing globalisation that has seen investors increasingly unconstrained by home market bias, he said.
“This is manifesting itself in demand for global strategies such as Global Equity Income, Global Equity, Global Credit, Global High Yield and Global Natural Resources. We have continued to invest in all of these strategies in 2014.
“We believe the reduction in allocations to global emerging markets is temporary, and have used the lull in demand as an opportunity to build our teams, recruiting new heads of Emerging Markets Equities and Fixed Income in the course of the year,” Wagstaff added.
It is, however, the increasing institutionalisation of the fund buying process that is likely to have the biggest effect on the sector.
Wagstaff said: “As I highlighted last year, one of the main changes resulting from the Retail Distribution Review in the UK and the growing profile of private banking across the globe is that the process of fund selection in the retail marketplace is now much more rigorous and akin to the institutional selection process.
As a result of this, he said, investment committees and fund panels the world over are engaging in a great deal of in-depth research. And, this, combined with the flight to the safety and security perceived to be offered by bigger brands and funds, has meant “an increasing amount of flow into fewer funds”.
To illustrate this, he pointed to data from Morningstar showing that “in the 12 months to December 2014, the top 1% of global funds attracted inflows of US$1.3trn.”
“We are in a ‘winner takes all’ market,” he added, “This is a trend which we recognise and have built into our distribution strategy, ensuring we support the marketing of prospective winners but also being bold enough to reduce activity when a strategy does not gain traction.”
The final two themes Wagstaff highlighted were the continued demand for absolute return and multi-asset funds.
However, he added: “The one key theme which I highlighted last year which did not remain current throughout all of 2014 was global demand for European equities. This tailed off in the second half of 2014, but remains an important theme in the longer term.”