Investments in foreign funds by the Chilean AFPs registered net outflows of 1.8 billion dollars during 2019, according to the monthly report issued by HMC Capital. At the end of December, total AUM of foreign funds were of 84.3 billion dollars, which represent 29% of the pension fund portfolios.
Outflows were registered mostly during the second half of the year. While the first 2 quarters of the year registered positive inflows for an amount of 2.5 billion, and 411.7 million dollars respectively, these were offset by net outflows of 3.6 and 1.1 billion dollars during the third and fourth quarter of 2019.
It is important to highlight than since the social protests started in Chile on October it is not possible to distinguish a clear trend in the direction of flows as the last three months of the year have shown different behaviour. During the month of October 760.8 million dollars net inflows were recorded, 1.6 billion in November while outflows of 3.4 billion dollars were registered in December.
Significant outflows in equity funds
In terms of management style, active funds have registered outflows of 2.1 billion dollars versus net inflows in passively managed funds and 73.7 million dollars in money market.
By asset class, the AFPs have shown preference for fixed income funds during 2019 with a net inflow of 424.7 million dollars during the year, versus equity funds that have registered outflows of 2.3 billion dollars during the same period of time. In accumulated terms, equity funds represent 72% of foreign funds invested in Chilean pension funds portfolios, versus 27% in fixed income and 1% in money market.
Specifically, in fixed income, net inflows during the year have been invested in financial bonds funds (+595.2 million dollars), emerging market debt in hard currency ( +427.5 million dollars), US High Yield ( +399.5 million dollars) and convertible bonds in euro (+245.1 million dollars).
On the other side, the Chilean pension funds have reduced their exposure to, among others, emerging market debt in local currency (-409.3 million dollars), flexible bonds ( -243.1 million dollars) and Latinoamerican emerging market debt (-206.1 million dollars).
In equity markets, there has been significant flow of funds directed towards strategies that invest in China ( +1.77 billion dollars) and to a leaser extend to Korean and Asian equity markets with net inflows of 305.5 and 230.4 million dollars respectively. In contrast, there has been signifcant outflows in Japan large Cap asset class of 1.116 billion dollars, German equity (-962.4 million dollars), Asia ex Japan (-788.0 million dollars), Hong Kong ( -764.1 million dollars) and India ( -664.9 million dollars).
Asset manager ranking
Five have been the foreign asset managers that have succeeded in registering inflows over 500 million dollars. UBS leads the annual ranking with net inflows of 1.281 billion dollars, followed by Aberdeen (900.1 million dollars) and JP Morgan ( 737.5 million dollars). Lord Abbet and Pimco occupy the fourth and fifth position with net inflows of 663.5 million dollars and 541.7 million dollars respectively.
On the opposite side, seven asset managers have register net outflows over 500 million dollars during the year. GAM and Matthews overpass the 1 billion mark with net outflows of 2.070 and 1.016 billion dollars respectively. These two are followed by: Invesco ( -937 million dollars), Schroders (-826.9 million dollars), Fidelity ( -788.8 million dollars), NN Investments ( -752.4 million dollars), DWS ( -702.9 million dollars) and BlackRock ( -522.2 million dollars).
In terms of total AUM as of end 2019, in both active and passive funds, BlackRock iShares leads the raking with an amount of 8.19 billion dollars as of end December 2019, followed by Investec and Schroders with a total aum of 7.5 and 6.99 billion dollars respectively.
The chart bellows shows the ranking of asset manager with a total AUM over 1.000 million dollars as of the end of 2019.
Funds with largest inflows and outflows during the year
Regarding the funds that have recorded the largest inflows, the funds AMUNDI FUNDS EMERGING MARKETS BONDS, ABERDEEN GLOBAL CHINA A SHARE EQUITY FUND and UBS CHINA OPPORTUNITY (USD) stand out with inflows of 1.5 billion dollars, 1.3 billion dollars and 887.2 million dollars respectively.
On the contrary, between the 10 funds that have registered the largest outflows during the year, JULIUS BAER -LOCAL EMERGING BOND FUND: AMUNDI FUNDS EMERGING MARKETS BONDS and DWS DEUTSCHLAND IC stand out with outflows of 1.4 billion dollars,1.4 billion dollars and 958.8 million dollars respectively.
Lastly, as a side note, we must point out that the fund AMUNDI Emerging debt and HSBC Global Liquidity in dollars with inflows and outflows are funds with different ISIN code but that seem to follow similar investment strategies.
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