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Investor sentiment hits DWS Group fund flows

Investor_confidence_downDWS Group senior executives do not expect to meet their fund flow target this year after seeing €4.9 billion of outflows in the second quarter (Q2).

The German asset manager said outflows were driven partly by a small number of institutional fixed income mandates and by retail investors dis-investing in active equity funds - though more positively multi-asset funds and strategic quant flows “rebounded” and the firm grabbed 18.5% market share in passive fund flows in Europe.

Market volatility and investor sentiment were among the causes of outflows that were seen in both quarters so far this year, though DWS said it remained committed to its 3%-5% net flow target in the medium-term.

In its Q2 statement DWS also reported that revenues were up 3% to €576 million, and profit increased 7% to €149 million.

Assets under management also increased by €22 billion compared to the second quarter of the previous year, to land at €687 billion.

Cost-cutting initiatives, which include the planned outsourcing of its fund administration to BNP Paribas Securities Services, are helping bring the cost-income ratio down. In Q2 it improved by 90 basis points to 74.1%.

Nicolas Moreau, chief executive, said: “While the net outflows were disappointing, we made a lot of good progress, adding new partnerships in sustainable investing and the digital space, making strategic hires to complement our distribution network and improving our operational efficiency.”

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