UBS GAM sees two years of fund outflows

Arrow down1UBS Global Asset Management (UBS GAM) has seen funds flow out of money market and non-money market products for the second year in a row, but managed to increase its adjusted profit before tax.

The asset management division of the Swiss bank, which published its 2013 annual report this week, saw CHF 4.8 billion (€3.9 billion) in outflows from non-money market funds in 2013. The figures rises to 19.1 billion if money market funds are added.

The UBS annual report says: “Global Asset Management experienced net outflows of client assets in 2012 and 2013. Further net outflows of client assets could adversely affect the results of this business division.”

The outflows appear to be due to activity in its Americas business, which mask a positive turnaround in net flows from third parties.

Although UBS GAM increased net flows from third parties into non-money market funds from a CHF 0.6 billion outflow in 2012 to a net inflow of CHF 0.7 billion in 2013, in both years total net outflows – which includes money market funds – were primarily due to an ongoing initiative by its Wealth Management Americas division to increase deposit account balances in UBS banking entities, the annual report says.

This led to CHF 8.3 billion in outflows from money market funds managed by UBS GAM in 2013 and CHF 6.2 billion in 2012.

In 2012, the asset manager saw a CHF 5.9 billion outflow in non-money market funds, but had seen a CHF 9 billion inflow the year before.

However, UBS GAM delivered an 8% increase in adjusted profit before tax for 2013 and an adjusted return on attributed equity of 33%, despite negative net new money.

Operating profit before tax was CHF 585 billion in 2013 compared to CHF 543 billion in 2013.

Invested assets totaled CHF 583 billion and assets under administration in its Fund Services division were CHF 432 billion as of 31 December 2013.

UBS GAM has increased its index capabilities in recent years. Exchange-traded funds now account for over a quarter of invested assets.

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