Redemptions from Active U.S. Equity Strategies Slow

30 Aug

Redemptions from Active U.S. Equity Strategies Slow

Long-only asset managers reported institutional assets under management of $26.8 trillion to eVestment at the end of Q2 2018, according to the 2Q 2018 eVestment Traditional Asset Flows Report. Net institutional investor flows measured -$177.4 billion in the second quarter of 2018 ending a five-quarter streak of net allocations. Cumulative institutional flows over the past year ending 2Q ’18 totaled -$15.2 billion.

In what could be a bit of good news for active managers, redemptions from active U.S. equity strategies slowed compared to prior quarters: -$52.6 billion in 2Q 2018 compared to -$68.8 billion in Q1 2018, -$88.8 billion in Q4 2017 and -$72.9 billion in 3Q 2017.

In other good news for active strategies, active global and international growth equity managers saw net inflows totaling +$7.3 billion in 2Q 2018.

Some other interesting points from the new report include:

  • Globally, equity strategies registered net institutional outflows of -$138.8 billion with active managers accounting for -$94.8 billion and passive strategies -$43.9 billion. On a geographic basis, U.S. equity managers saw net redemptions of -$64.8 billion and non-U.S. managers -$74.0 billion.
  • Fixed income managers, excluding cash management strategies, saw aggregate redemptions of -$17.8 billion in Q2 2018. The quarter marked a reversal from the preceding two-year period which saw institutional inflows totaling +$767.7 billion for a quarterly run rate of +$96.0 billion.
  • S. domiciled investors were net detractors from most major universes in Q2 2018. The largest dollar outflows were from U.S. equity (-$75.2 billion), U.S. fixed income (-$16.0 billion) and global multi-asset strategies (-$6.0 billion). U.S. investors did provide net inflows, albeit on a small scale, to a wide array of non-U.S. fixed income strategies including global, Europe, Japan, Asia-Pacific and Canada managers.
  • K. domiciled investors were net redeemers of assets in the most recent quarter. The largest U.K. investor-led outflows were from global equity (-$7.7 billion in 2Q ’18), Asia-Pacific equity (-$2.9 billion) and U.K. equity strategies (-$2.5 billion). Flows to fixed income strategies, to which U.K. investors were relatively large allocators over the prior 4 quarters, also turned negative. The lone bright spot was for emerging markets equity and debt strategies which saw net inflows of +$0.3 billion and +$2.1 billion during the quarter, respectively.

To download the full report, please click here.