European unaffiliated sub-advised mutual funds are experiencing a resurgence in 2023, defying market volatility, according to a recently published report by Cerulli Associates.
The June issue of the ‘Cerulli Edge—European Monthly Product Trends‘ report finds that despite a decline in assets in 2022, these funds attracted €32.9 billion (US$35.7 billion) in net new inflows during the first four months of 2023.
However, assets under management (AUM) remain below the peak recorded in 2021.
The report also indicates that asset managers expect strong demand for European equity (26%), global equities (24%) and US equity (21%).
Fabrizio Zumbo, director of European asset and wealth management research at Cerulli, said that “sub-advisors need to demonstrate that they are superior to their competitors – on price and client service to secure new mandates.”
He also said that having a robust IT infrastructure and dedicated staff is crucial and the sub-advisory market in Europe is less concentrated, with the top five sub-advisors accounting for 21.7% of the overall market.
The report found that the industry is growing at different rates across European countries, with the UK, Italy and Switzerland being the largest markets in terms of AUM.
The positive inflows and increasing demand indicate renewed investor confidence in the sub-advisory model.
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