Hundreds of multi-asset funds are failing to gain traction among investors despite a concerted push into the space by asset managers, analysis shows.
Data from Morningstar shows just 8% of the 470 funds in the four main IMA Mixed Asset sectors have managed to take in £50m or more so far in 2013.
The figures highlight how the raft of multi-asset launches seen in recent years has failed to withstand a trend towards increasingly polarised fund flows.
This struggle to gain traction for many funds comes despite net retail inflows into the four main IMA mixed asset sectors topping £3.6bn in the first ten months of 2013.
The success of Standard Life Investments’ GARS fund has prompted a rush by peers to launch other multi-asset vehicles, but the SLI product continues to outstrip rivals.
In the year to end of October, GARS enjoyed the same level of net inflows as the whole of the IMA Flexible Investment, Mixed Asset 0-35% Shares, Mixed Asset 20-60% Shares and Mixed Asset 40-85% Shares sectors combined.
GARS and Newton Real Return, the two multi-asset funds that remain by far the most popular with retail investors, lie outside the mixed asset sectors: both sit in the IMA Targeted Absolute Return sector.
These two portfolios took in £3.6bn and £880m respectively in the ten months to 31 October.
However, some funds within the managed sectors have seen sizeable net inflows this year: the three funds to have amassed the highest inflows so far are Baring Multi-Asset, the BlackRock Cautious Portfolio and Invesco Perpetual Distribution.
Barings’ fund more than doubled its assets from the start of the year, taking in £335m to stand at £643m; Invesco Perpetual’s fund took in £438m during that time, while BlackRock Cautious amassed £278m.
In October, Barings stopped promoting its Dynamic Asset Allocation, Dynamic Growth and Multi-Asset funds to new institutional clients after strong inflows, although the funds have not been soft-closed.
A look at the groups that have raised most money this year throws up several notable names, with perennial mixed-asset stalwart Jupiter accompanied by Seven Investment Management, Close Brothers’ discretionary range, Premier Asset Management, and Vanguard in the top five.
7IM has seen inflows of £383m across its portfolios in the IMA Mixed Investment 0%-35%, 20%-60% and 40%-85% sectors, which makes up over 10% of the total £3.3bn in these funds.
Jupiter has attracted around £280m in total inflows, primarily into its two largest portfolios, Jupiter Merlin Income and Balanced.
Meanwhile, Premier’s sales totalled £220m across its four portfolios, bringing total AUM up to £490m, while Vanguard saw total assets across its four Life Strategy funds more than double to £654m, with inflows of £387m.
Inflows into Vanguard’s passive range are a sign investors are turning to tracker funds to cut costs, and this is also evident from the latest IMA sales figures, which show retail inflows of £448m into tracker funds in October, the highest monthly flows on record.
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