Mixed asset funds, some of which are “old fashioned”, are being replaced by newer funds, according to data that has shown a general upsurge in product liquidations.
There were 437 liquidations in the second quarter of 2016, reversing a general trend of falling liquidations since 2012.
The number of liquidations “went up significantly” (+22%) compared to the same period last year, though fund mergers declined “substantially” (-23%), said Lipper, a fund data provider.
There were 170 mixed asset launches in Q2 – the highest of any funds – and 101 mixed asset liquidations, second only to equity liquidations, which had 147.
“The high activity in the mixed-asset sector might not be surprising, since this sector also contains multi-asset products, which have been in the favor of investors over the last two years,” Lipper analysts Detlef Glow and Christoph Karg wrote in the ‘European Fund Market Report for Q2 2016’.
“Fund promoters appear to want to participate in this trend by launching new products. On the other hand, there are still a lot of mixed-asset funds around that are structured in the old-fashioned way [funds limited to long-only investments in bonds and equities]. Since these products may look a bit out of fashion, fund promoters may liquidate them and launch new products with a wider investment strategy.”
©2016 funds europe
