Fixed income funds saw outflows of £267m in January 2016, the Investment Association said on Monday, which accounted for more than half the total outflows of -£463m recorded for the month.
Vanguard has launched its first range of active ETFs as it seeks to extend its presence in Europe into active funds.
Markets are in a ‘troubling, bifurcated state’ and there is no such thing as a ‘silver bullet’ in terms of the bond liquidity problem, warned Gill Hutchison, head of investment research at City Financial.
Bond fund managers have taken a kicking from the money pages of late with accusations of bad decision making, as well as being overpaid and, more importantly, ill prepared for a liquidity squeeze.
The Financial Conduct Authority is considering improving the flexibility with which funds are able to ‘soft close’.
Mark Carney has, according to the Sunday Times, told fund managers to prepare for a mass sell-off in stocks and bonds that could be triggered by a Bank of England rate hike.
The concept of daily liquidity for bond funds could soon be tested like never before if some of the more pessimistic market commentators are proved right.
The proliferation of multi-asset funds has led to an increased number of asset classes being open for investors, and some less accessible ones moving more into the mainstream.
Investors are constantly on a hunt for assets that can improve the risk-adjusted return of their financial portfolios and in times when the economy is performing poorly, there is a demand for assets that have a low correlation with such traditional asset classes as stocks and bonds.
Tradeweb has launched an electronic hedging tool for European ETFs which makes it easier to source, price and trade the basket of underlying bonds needed to create or redeem shares in fixed income ETFs, with the aim of improving their efficiency and liquidity.
The Prudential Regulation Authority (PRA) has found five UK banks have a shortfall of an aggregate £27.1bn, meaning they are below the minimum 7% liquidity required by Basel III legislation.
Renaissance Asset Managers has restricted flows into its Sub-Saharan Fund to existing investors after attracting $40m since the start of the year.
