money market funds help swell

Money market funds helped BlackRock and JPMorgan retain their positions of largest and third largest fund companies in Europe last year, according to latest data from Morningstar Direct.

money market funds help swell


Both were part of a wider trend, which saw American fund houses holding firm despite market volatility, while French asset managers saw first hand the effect increased interest rates from the banks could have on business.

Morningstar Direct’s latest Europe Asset Flows Update showed Pimco saw organic growth of 17% last year taking its total net assets to €63bn. JPMorgan and BlackRock saw smaller growth of 6% and 5% each, but this took their total net assets up to €196bn and €205bn respectively.

Au revoir

Dan Lefkovitz, from Morningstar Direct’s European research team, said: "French behemoths BNP Paribas and Amundi both saw organic declines in the double digits for 2011. BNP’s €930m long-term outflows in December capped off a year of more than €22bn leaving its funds. Amundi’s outflows of €4bn in December brought its losses for the year to a similar level."

For both companies, flows out of their money market businesses played a significant role. Lefkovitz explained: "French investors had several reasons to abandon money market funds. French banks boosted interest rates on deposits in an effort to shore up their balance sheets. New European regulation has also forced money market funds to become more conservative, improving their safety but denting their yield potential."

The appeal of JPMorgan and BlackRock’s money market funds was largely due to their US dollar and sterling offerings as investors steered clear of the euro.

Of the European fund houses, Franklin Templeton was a big winner, with organic growth of more than 14%.

"But momentum slowed going into 2012, as the twin engines of Franklin’s European growth – Templeton Global Bond and Templeton Global Return – sputtered in December and for the fourth quarter as a whole," Lefkovitz said.

"European investors took nearly €1bn from the former and €500m from the latter during the last three months of 2011, though the two funds still managed to end the year with more than €11bn in new European money," he added.



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