SHARES in Aberdeen Asset Management faced a tough day of trading yesterday after the fund manager announced the fifteenth consecutive quarter of net outflows from its funds.
In a trading statement the business announced that net outflows for the three months to the end of December totalled £10.5 billion, with chief executive Martin Gilbert saying that the US presidential election had spooked investors.
“Investor sentiment had been improving steadily in the early part of the quarter, but stalled following the US presidential election result with investors putting asset allocation decisions on hold,” he said.
The firm ended the quarter with £302.7 billion of assets under management, having had £312.1bn at the end of September.
The amount of money flowing into its funds increased from £8.4bn in the three months to the end of September to £10.2bn, but this was offset by an increase in outflows from £15.5bn to £20.7bn.
Shares in the Aberdeen-based business closed three per cent down at 249.6p at the end of trading yesterday, having opened at 258.1p and fallen to a low of 244.4p during the morning - a drop of five per cent.
That means shares experienced their lowest close since 27 June 2016, when they fell to 247.1p.
The bulk of the net outflows came from the firm’s equity funds, which despite attracting assets of £3bn during the three months also suffered £9.6bn of outflows.
Of this, £4.2bn came from previously announced redemptions from a UK wealth manager and a sovereign wealth fund.
Despite this, Mr Gilbert said that Aberdeen “remains in good shape” with its equity strategies producing “strong returns for the year”.
“While growing interest in a number of our strategies is likely to continue to be masked, in the short-term, by significant withdrawals by a small number of clients, I am encouraged by the progress being made,” he said.
Jason Hollands, managing director of financial services business Bestinvest, whose biannual Spot the Dog report highlights funds that consistently produce poor performance, said that Mr Gilbert was right to note that Aberdeen’s funds had shown an improvement in recent times.
“Aberdeen first rose to prominence in Spot the Dog back in January 2015, when nine funds appeared,” he said.
“This partially reflected the firm’s acquisition of Scottish Widows Investment Partnership [SWIP], a perennial underachiever, but also relative weakness in some asset classes including Asia and emerging markets, global equities and US equities which couldn’t be pinned on SWIP.
“Aberdeen continue to have the most funds in the latest Spot the Dog at four, though the trend is an improving one - this time last year they had 11 of their own-brand funds in the report including some of their flagship Asian and emerging market funds, as well as seven other funds they managed for other firms.”
Despite the relative improvement, Laith Khalaf, a senior analyst at financial advisory firm Hargreaves Lansdown, said that assets under management at Aberdeen have been boosted by “a resurgence in emerging markets and the fall in the pound, both of which are outside the company’s control”.
“The woe continues at Aberdeen as funds continue to flow in the wrong direction, and the fund manager has now clocked up fifteen consecutive quarters of net withdrawals,” he said.
“Fund outflows are part and parcel of asset management, but such a sustained period of significant withdrawals is hard to swallow, and perhaps more worryingly shows no signs of abating.”
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