Americas and Iberia: Two Drivers of Growth for M&G

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Photo courtesyIgnacio Rodríguez Añino, Head of Distribution for the Americas at M&G; and Alicia García Santos, Head of M&G for Spain, Portugal, and Andorra.

As part of the presentation of its annual results, M&G announced that it continues to expand its international presence in the asset management business. In fact, third-party assets outside the United Kingdom increased to reach 142.54 billion dollars, compared to the 118 billion recorded at the end of 2024.

According to Andrea Rossi, Group CEO, 2025 was a year of strong commercial momentum and strategic progress for M&G. “We continue to invest in our business, laying the foundations for long-term growth and expanding our distribution and investment capabilities internationally. In May, we also closed a long-term strategic partnership with Dai-ichi Life HD, which is now our largest shareholder,” he noted.

The asset manager states that its strategic priorities are clear: maintaining its financial strength, continuing to simplify the business, and driving sustainable growth across all markets and segments. One of these markets is the Americas, where the company’s business includes U.S. offshore, institutional clients in Latin America, as well as institutional markets in the United States and Canada.

“Our growth strategy is tailored to each market, with a strong focus on understanding local client needs and offering a broad range of investment solutions. Across the region, we are focused on delivering differentiated capabilities in both public and private markets, leveraging M&G’s global investment platform while adapting distribution and product positioning to each segment,” said Ignacio Rodríguez Añino, Head of Distribution for the Americas at M&G.

Reviewing 2025, Rodríguez noted that the asset manager’s growth in the Americas was driven primarily by non-U.S. equity and fixed income strategies, along with structured credit in the institutional channel. “We also saw growing client interest in diversifying beyond U.S.-focused exposures. Looking ahead, we expect this trend to continue, with increased demand for international diversification, including European equities, Japan, emerging markets, and structured credit solutions, especially among institutional investors,” he stated.

Iberian market

Another key market for the asset manager is Iberia, where it closed 2025 with 9.4 billion dollars (8.2 billion euros) in assets under management in Spain, a significant milestone as it marked 20 years in the market. Under the leadership of Alicia García Santos, Head of M&G for Spain, Portugal, and Andorra, the firm’s assets under management have grown steadily from 5.2 billion euros in 2020 to 8.2 billion in 2025, supported by the strengthening of its local presence with a team of 20 professionals in distribution and investment, including specialists in public fixed income, private debt, and real estate.

According to García, the main drivers of growth in 2025 were strong demand for its public fixed income and European equity strategies, complemented to a lesser extent by activity in ABS. “We have also continued to diversify our client base and expand our strategic offering, with institutional investors now representing a significant part of our business, which is now much more diversified,” she added.

García highlighted that M&G’s expansion in private markets, through Catalyst, responsAbility, PCP, and BauMont, continues to strengthen its capabilities and its ability to meet the evolving needs of clients in the region. She noted that in 2025, “M&G also reinforced its role in the real economy by channeling institutional capital into areas where investment is most needed.”

BNP Paribas AM Seeks to Increase Managed Assets Volume by More Than 5% by 2030

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Photo courtesySandro Pierri, CEO of BNP Paribas Asset Management.

The BNP Paribas Group presented this week its 2030 Strategic Plan for its integrated asset management platform, which consolidates it as a key component in the Group’s path toward a return on tangible equity of 13% in 2028.

According to the company, following the successful acquisition of AXA IM, BNP Paribas Asset Management now has a large-scale presence across Europe, representing a transformative leap in its growth. The firm currently manages more than 1.6 trillion euros, covering all asset classes and offering a highly diversified mix of strategies and distribution channels. In addition, as highlighted by the firm, “the BNP Paribas Asset Management platform leverages the strength of the BNP Paribas Group’s integrated model, including its origination capabilities and broad distribution reach, enabling it to hold a leading position in alternative assets, long-term savings, and a rapidly expanding ETF franchise.”

The entity explains that its 2030 plan is structured around four strategic growth pillars: strengthening leadership in alternative assets; expanding active management and accelerating ETF development; developing partnerships with insurers and institutions; and accelerating growth in wealth and retail management segments.

Plans in figures and targets

Based on these growth drivers, the plan sets an ambitious financial trajectory for the period from 2025 to 2030. Specifically, it has set a target of achieving approximately 350 billion in cumulative net inflows by 2030 and growth in assets under management exceeding 5% annually (compound annual growth rate 2025–2030), with a modeled market effect of around 0%.

In addition, the asset manager expects revenue growth of around 4% between 2025 and 2030 (compound annual growth rate), mainly driven by the increase in assets under management and synergies. It also expects to keep operating expenses stable between 2025 and 2030 and improve the cost-to-income ratio to below 60% by 2030. Finally, it aims for growth in pre-tax income to nearly double by 2030 (equivalent to a compound annual growth rate of approximately 13% compared to the 2025 pro forma base) and a pre-tax return on allocated capital (RONE) above 65% in 2030 (versus 48% in 2025).

According to the firm, these targets will be achieved “through rigorous execution and the generation of approximately 150 million euros in revenue synergies and around 400 million euros in cost synergies by 2029, thanks to platform convergence, fund rationalization, and operational efficiencies of scale.” It also notes that the platform’s technological and client service capabilities will continue to be strengthened through the integration of artificial intelligence tools across the entire investment and client service value chain, significantly enhancing scalability and performance.

The executives’ view

In the opinion of Sandro Pierri, CEO of BNP Paribas AM, the asset manager is entering a new phase of transformation and growth driven by favorable structural trends in savings and investment. “The objective of our 2030 Strategic Plan is to strengthen our position as one of Europe’s most powerful investment platforms. Thanks to the combination of quality and scale in public and private markets, as well as the strength of the BNP Paribas Group ecosystem, we are uniquely positioned to connect savers and investors with all the opportunities offered by the real economy. Our mission is clear: to deliver solid and sustainable results to our clients while helping finance the economic transitions shaping the future.”

For his part, Renaud Dumora, Deputy COO and Head of the Investment & Protection Services division, adds: “The Investment & Protection Services (IPS) division is an integrated services ecosystem that is particularly well positioned to meet the growing and evolving needs of individuals, companies, and institutions in Europe and other markets. In this context, the new scale of our asset management business will provide a strong boost to the IPS division and the entire BNP Paribas Group. Its scale, the diversity of its capabilities, and its integration within our One Bank model will be decisive in channeling long-term capital into the real economy, while helping clients adapt to economic, social, and technological changes. With our new strategic plan, we are ideally positioned to open new avenues for growth.”

Scotiabank Bets on Dallas to Build Business in North America

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Scotiabank announced the opening of its new regional office in Dallas, Texas. The objective is to strengthen its presence in North America, as the only bank with the capacity to support its clients in the Mexico–United States–Canada region, the company reported in a statement, considered the second most important economic bloc in the world, with approximately 30% of global GDP.

It also seeks to strengthen its presence in that part of the United States, very close to the border with Mexico, an area of significant and growing trade exchange.

The expansion is relevant if we consider the exponential growth of regional trade, especially ahead of the upcoming review of the United States–Mexico–Canada Agreement (USMCA). Trilateral trade in the region exceeds 1.5 trillion dollars annually, according to official figures from the three nations.

“North America is experiencing a new stage of productive and financial integration. At Scotiabank, we have the scale, presence, and financial architecture necessary to support our clients operating in all three countries, connecting solutions, capital, and opportunities along the corridor,” said Pablo Elek, CEO of Scotiabank Mexico, in the statement.

The Canadian-headquartered firm has consolidated its presence in the region with assets of approximately 1.5 trillion dollars, where North America represents 71% of the bank’s income. Since 2023, the institution has strengthened its strategy focused on the region, where it currently offers comprehensive financial solutions to companies with cross-border operations, including investment financing, treasury services, and foreign exchange operations, as well as access to international capital markets.

Geopolitical conflicts: Tools to benefit from market volatility in investment portfolios

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Pixabay CC0 Public DomainAutor: sergeitokmakov

Tensions between the United States, Israel, and Iran are once again placing geopolitics at the center of financial markets. For asset managers, the challenge is not only to react to volatility, but to design portfolios capable of withstanding energy shocks, unexpected inflation, and recurring episodes of global uncertainty.

For years, institutional investors operated under an implicit assumption: geopolitics could trigger episodes of volatility but rarely altered the long-term functioning of global markets. That paradigm is now changing.

The conflict in the Middle East serves as a reminder that geopolitical risks can directly affect energy markets, inflation dynamics, and the behavior of financial assets.

The critical point lies in the Strait of Hormuz, the world’s most important energy corridor, through which approximately 20% of global oil consumption flows. Any disruption in this strategic route could trigger sharp movements in energy prices, inflationary pressures, and greater volatility across financial markets.

For asset managers, the key question is clear: how to construct portfolios capable of withstanding and adapting to a more volatile geopolitical environment.

This geopolitical context arrives at a time when the asset management industry was already undergoing structural changes.

The world’s largest asset managers currently oversee nearly $140 trillion in assets, intensifying competition to generate alpha, innovate in product offerings, and expand distribution channels.

At the same time, several analyses point to clear trends shaping the industry:

  • accelerated growth of private markets
  • fee pressure in traditional products
  • greater use of technology and artificial intelligence in portfolio management
  • increasing demand for alternative strategies

In this environment, reports such as Northern Trust’s Global Investment Outlook 2026 warn that markets may face greater dispersion among assets, more persistent inflation, and recurring episodes of volatility—factors that reinforce the importance of active management.

Another important transformation is the growing convergence between public and private markets. Increasingly, traditional asset managers are incorporating private market strategies, while alternative firms are seeking structures that allow them to broaden their investor base.

The result is a new asset management model in which public and private markets begin to integrate within a single investment architecture.

Portfolio resilience in the new geopolitical era

In this new environment, portfolio resilience no longer depends solely on diversification between equities and bonds. It increasingly relies on a combination of structural factors and the architecture of the investment vehicle itself.

How markets typically react to geopolitical shocks

Although geopolitical conflicts often trigger initial episodes of volatility, they can also create temporary dislocations across financial markets. Historically, such events tend to affect asset classes and economic sectors in different ways.

In the case of tensions in the Middle East, markets usually react through four primary channels:

  • Energy and commodities: risk to strategic routes such as the Strait of Hormuz can push oil and natural gas prices higher.
  • Safe-haven assets: during periods of heightened risk aversion, assets such as gold, the U.S. dollar, and U.S. Treasury bonds often attract stronger inflows.
  • Defense and security: geopolitical conflicts are often accompanied by increased defense and national security spending.
  • Market volatility: rising uncertainty tends to increase volatility and dispersion across asset classes.

From strategy to investment vehicle

In this context, the structure of the investment vehicle becomes almost as important as the underlying strategy itself.

Asset securitization allows investment strategies or portfolios to be transformed into more efficient and scalable vehicles, offering several advantages for asset managers:

  • facilitating access to international capital
  • consolidating institutional track records
  • improving transparency and distribution
  • providing flexibility in the selection of underlying assets and enhancing diversification 
  • connecting private market opportunities with the liquidity of public markets

These solutions are gaining traction precisely because they address one of the industry’s biggest challenges today: how to expand access to new investment strategies in an increasingly competitive environment.

Geopolitical crises generate uncertainty, but they also tend to create new investment opportunities.

In this environment, institutional asset managers are paying greater attention to risk diversification, exposure to real-economy assets, and the use of more flexible investment structures.

In a world where geopolitics once again plays a decisive role in financial markets, firms that successfully combine structural innovation, genuine diversification, and global access to capital will be better positioned to transform volatility into a competitive advantage.

In line with this evolution in the industry, solutions such as those offered by FlexFunds enable asset managers and investment firms to transform strategies into efficient and scalable investment vehicles, facilitating access to international markets and distribution to a global investor base. For more information, please contact our experts at info@flexfunds.com

Blackstone Appoints Rashmi Madan as Global Head of Portfolio Solutions for Private Wealth

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Photo courtesyRashmi Madan, Global Head of Portfolio Solutions for Private Wealth

Blackstone has announced significant changes to accelerate the growth of its Private Wealth business. With more than $300 billion in assets under management from the global private banking channel, the business has been a pioneer in serving individual investors for more than two decades.

After overseeing the development of the private wealth business in EMEA, Rashmi Madan, a Blackstone veteran with 15 years at the firm, has been promoted to the newly created role of Global Head of Portfolio Solutions. According to the firm, in this new position, Madan will lead the expansion of Blackstone’s multi-strategy solutions, leveraging her extensive experience across asset classes and long-standing client relationships. The firm plans to develop several investment solutions within this new initiative.

As a result, Simona Maellare will join Blackstone as Head of EMEA for Private Wealth, where she will lead the firm’s efforts to expand and strengthen its private banking business in Europe and the Middle East. Maellare most recently served as Global Co-Head of the Alternative Capital Group at UBS, as well as Co-Head of EMEA for OneUBS, and brings more than 30 years of experience advising and partnering with alternative asset managers on capital raising and strategic growth in the EMEA region. With a long track record advising some of the world’s leading asset managers on their expansion in EMEA, Maellare brings to Blackstone exceptional expertise, trusted relationships, and a proven ability to build and scale businesses at the highest level.

The firm explains that these appointments strengthen Blackstone’s leadership in two priority areas for its next phase of growth and will help expand multi-strategy investment solutions for advisors and their clients, as well as accelerate the international expansion of the Private Wealth business.

“We have built this business by investing in exceptional talent with a deep commitment to clients. Rashmi and Simona each bring experience and relationships that are difficult to replicate: Rashmi in multi-strategy solutions, which we see as a powerful growth frontier, and Simona in the markets of Europe and the Middle East, where the opportunity for individual investors is significant. Simona’s arrival and Rashmi’s new role will be key as we continue to develop differentiated solutions for our clients globally. I look forward to working closely with both,” said Joan Solotar, Global Head of Blackstone Private Wealth.

For her part, Rashmi Madan, Global Head of Portfolio Solutions for Blackstone Private Wealth, stated: “Multi-asset investing allows clients to access the breadth of Blackstone’s platform within a single strategy. As private markets continue to expand and advisor toolkits become more sophisticated, Blackstone Portfolio Solutions will help deliver integrated, investor-focused portfolios built on the firm’s flagship perpetual strategies. I am excited to lead this business and capitalize on the opportunities ahead.”

More Population, Multinationals, and International Investors Behind the Transformation of Miami Real Estate

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Photo courtesyPilar Lecha, Real Estate Broker.

The transformation that Miami’s real estate market is undergoing is a clear example of what is happening across Florida, where two major trends converge: population movements and its appeal to investors. According to Pilar Lecha, a real estate broker with more than a decade of experience in the luxury market, the strong population growth in the state is reshaping cities, and Miami is the clearest expression of this broader shift.

“More than 1,350 people a day are moving to the state of Florida, and a third of them are arriving in Miami. Florida has become the second state in receiving Americans who decide to relocate. This is a trend we began to see after the COVID-19 pandemic, but it has persisted over time. In addition, this movement has been reinforced by the fact that numerous multinationals have also decided to move their headquarters to Miami, attracted by the city’s potential in terms of location, business strength, and economic level,” explains Lecha.

In this regard, Citadel — Ken Griffin’s hedge fund — Blackstone, and Inter&Co are among the latest examples of major financial firms that have set up in the city. As Lecha notes, “many of these firms have moved to Brickell, which has come to be known as the Wall Street of the South, due to its strategic location and the financial community that has developed there.”

Investment opportunities

As a result, Lecha explains that these trends have transformed the real estate market, increasing its value and making it more attractive as an investment. “When investors arrive in Miami, what they want to know is whether they are too late or still on time to invest in this market. In my view, there are still interesting opportunities, but above all, it is an investment with significant growth potential. One figure that illustrates this opportunity is that there are currently 153 buildings under construction. What we are seeing is that residential supply is growing, particularly in segments aimed at short-term rentals,” she notes.

A key factor supporting demand for real estate in Miami, according to Lecha, is that the market facilitates leverage, “which allows investors to enter with smaller tickets and ultimately make significant investments.” In her view, two other factors that make this market attractive are a more favorable tax framework for investors and an environment with a somewhat weaker dollar, “as both increase investors’ purchasing power.” Finally, she highlights that the strong presence of international investors means the local market is more sensitive to mortgage rates and global uncertainty.

Investor profile

But who is leading investment? According to MIAMI Realtors, in 2025 foreign buyers accounted for 15% of residential purchases in South Florida, seven times the national average (2%). In addition, nearly half of all international purchases in Florida are concentrated in Miami, Fort Lauderdale, and West Palm Beach; more than half of these transactions are made in cash, and most properties are acquired for investment or vacation use.

Latin America is the driving force behind this international flow: Colombia leads with 15% of total foreign buyers in Miami, followed by Argentina (11%), Mexico (7%), Brazil (7%), and Venezuela (5%). “Latin American investors have always shown interest in Miami, and real estate is a way to bring their capital. Beyond returns, this type of investor finds legal certainty here, and that holds great value. Brazilians and Colombians are currently the most active investors,” she explains.

Finally, Lecha adds that she has also observed growing interest from European investors, particularly Spaniards: “They tend to be entrepreneurs — both large and small — as well as family offices. They enter with smaller tickets and are also investing in smaller properties.”

A young city with a future

One aspect that Lecha emphasizes is that this transformation in real estate is occurring alongside the evolution of the city itself. “Miami has managed to break its seasonality. We cannot forget that, in addition to being a business and financial hub, it receives 17 million tourists a year, with its port being the busiest in the United States. To that reality driven by tourism, we now add all these large companies, business activity, and population inflows. This translates into a dynamic, young city full of events — such as the World Cup — that further place it on the global map,” she highlights.

The city’s character is relevant because, according to Lecha’s experience, its evolving features also influence investment trends. “The clearest example is the crypto asset ecosystem. Miami has positioned itself as a benchmark in this space, thanks to the firms that have established themselves here, and as a result we are seeing many real estate transactions carried out in crypto,” she says. She adds: “We see two profiles buying real estate with crypto. One is an older buyer, over 50, who holds crypto and, being more cautious, moves it into property. The other is a younger profile, more familiar with this asset, who either takes out loans in crypto or completes transactions in crypto to maintain their position in cryptocurrencies.”

Her conclusion, after years living in the city and working in the real estate market, is that all these “energies” coexist in Miami and give it a unique vitality.

A Disciplined Approach to Global Equity Income

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ingresos renta variable global
Photo courtesyMatt Burdett, Head of Equities and Managing Director, Thornburg

Narrow market leadership, elevated valuations, and unevenly priced risk are raising the bar for portfolio construction. For many investors, the challenge is maintaining equity exposure while reducing reliance on concentration, duration sensitivity, and multiple expansion. In this Q&A, Matt Burdett, Head of Equities at Thornburg, explains how the Thornburg Equity Income Builder Fund is positioned to deliver resilient income and diversification through disciplined global stock selection.

What role is Equity Income Builder designed to play in a portfolio?

We think of the Fund as a diversified global equity allocation where income plays a meaningful role in total return. Investors often use it as a core holding with a defensive tilt, or as a complement to growth-oriented or U.S.-heavy strategies.

The idea isn’t to replace growth exposure, but to balance it. By focusing on high-quality global companies with durable cash flows, the strategy brings valuation discipline and diversification back into portfolios that may have become more concentrated over time.

How has the Fund delivered income across market cycles?

One thing that’s been very consistent is dividend growth. That’s been driven by companies with resilient earnings and management teams that take capital allocation seriously. Dividends increased again in 2025, which reinforces our focus on sustainability rather than chasing yield.

From a total return standpoint, the Fund has tended to participate in market upside while cushioning more of the downside. That balance has helped deliver positive returns in most calendar years since inception and contributed to a smoother return profile across different environments.

Markets feel stretched, and leadership remains narrow. What is the key challenge today?

In many parts of the market, investors aren’t being paid much for taking risks. Valuations are elevated, and the margin for error is thin. In that kind of environment, broad, benchmark-driven exposure can struggle, especially when returns are concentrated in a small number of stocks.

That’s why we stay very focused on bottom-up stock selection and balance-sheet strength. When markets become less forgiving, those fundamentals really start to matter.

What changes in global equity markets matter most for income investors?

For a long time, capital appreciation did most of the heavy lifting for equity returns. That’s starting to change. Returns are becoming more dispersed across regions and sectors, which means income and dividend growth are again becoming more important contributors to total return.

In our view, that shift favours strategies that can source income from different parts of the market rather than relying on a narrow leadership group.

How is the portfolio positioned today?

The portfolio is built around high-quality global businesses with durable cash flows and the ability to sustain and grow dividends. While markets delivered positive returns in 2025, leadership remained quite narrow in some places. Our positioning reflects a preference for balance and income resilience rather than leaning heavily into a small group of dominant names.

Where is dividend growth coming from?

It’s largely coming from business quality rather than leverage or short-term cycles.

In telecoms, recurring revenues and scale support steady cash generation. Utilities and energy benefit from regulated assets and long-lived infrastructure. Healthcare holdings tend to have stable demand and strong balance sheets. In financials, dividend growth reflects more conservative payout ratios and improved capital efficiency. And in select technology holdings, dividends are supported by strong free cash flow rather than aggressive payout policies.

Where are you most cautious?

We’re careful around businesses where dividends depend on leverage, refinancing conditions, or very supportive capital markets. As the cost of capital rises, dividend sustainability must be supported by free cash flow. We’re also mindful of situations in which valuation has run ahead of fundamentals, and income has become secondary to growth narratives.

How does this approach support downside resilience?

Downside resilience comes from diversification across sectors and regions, strong balance sheets, and a focus on recurring revenues. Because income is sourced from multiple areas of the market, the portfolio isn’t reliant on any single economic outcome. Historically, that’s translated into meaningfully lower downside capture during market drawdowns.

 

 

 

To learn more, visit Thornburg.com

Professionalization, Holistic Vision, and Impact: The Three Trends Shaping Philanthropy

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As philanthropy and impact investing take on a more strategic role in how families manage their wealth, and as the great wealth transfer accelerates, family offices are not only adapting but are also beginning to influence how capital is deployed to address social and environmental challenges.

In this regard, the UBS Global Family Office Report 2025 identifies three clear trends in how these high-net-worth entities approach philanthropy: greater professionalization of these services, a stronger role for family offices within philanthropy, and a shift from isolated impact toward integration across the entire family asset portfolio.

According to the report’s conclusions, the family office landscape is not changing in a single direction, nor at the same pace for everyone. Rather, we are seeing a global trend in which different factors point to a shift toward more integrated ways of organizing capital and aligning wealth, business, and philanthropy.

Response of family offices

“For some family offices, this has meant looking beyond mere portfolio construction and thinking more deliberately about alignment between governance structures, investment strategies, and operating businesses. Others are placing greater emphasis on internal coordination, with the family office increasingly acting as the connective tissue between entities, advisors, and decision-makers,” explain UBS.

In their view, in practice this has less to do with adopting a specific ideology and more with responding to increasing complexity through better governance, clearer mandates, and stronger execution.

On the other hand, the report finds that collaboration has become another common theme: “Whether working with peers, co-investors, public institutions, or philanthropic partners, family offices are seeking to operate in more interconnected ways. The ability to convene and contribute within partnerships is becoming just as important as financial expertise.”

In this context, a relevant aspect is the role being played by technology and AI, which are not yet widely integrated into philanthropy or family office governance. “Many firms recognize their longer-term potential, especially for improving transparency, comparability, and insight in increasingly complex structures. Over time, digital capability will likely become an important support for decision-making, alongside judgment and experience,” the report notes as a trend.

According to its conclusions, the family offices best positioned for what lies ahead will be those that combine disciplined execution with openness to new ways of working; those that view alignment, collaboration, and continuous learning as essential capabilities. “For those seeking to manage their wealth with purpose and influence, this moment offers an opportunity: to shape their own legacy and, equally important, the broader systems in which their capital operates,” the report concludes.

State Street IM Launches an ETF of Listed and Private ABS

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ucits corporate bond funds shocks
Pixabay CC0 Public Domain

State Street Investment Management has announced the launch of the State Street IG Public & Private ABS ETF (PRAB), an actively managed exchange-traded fund designed to expand investor access to a fast-growing, higher-quality segment of global credit markets.

PRAB primarily invests in investment grade asset-backed securities (ABS), both listed and private, including collateralized loan obligations (CLOs), as well as residential and commercial mortgage-backed securities. The fund’s innovative exposure to both listed and private ABS responds to growing investor demand for income-oriented strategies with higher ratings. The fund’s allocation to private ABS may include, among others, securities provided by Apollo Global Securities, LLC.

By investing across a broad range of investment grade ABS — including ABS sectors that have historically had limited or no representation in the Bloomberg US Aggregate Bond Index — PRAB can serve as an effective complement to core bond allocations and help diversify sources of income within a bond portfolio.

“Although the global asset-backed financing market exceeds $20 trillion, ABS have long been underrepresented in investor portfolios,” said Anna Paglia, Chief Business Officer at State Street Investment Management. “With PRAB, we are expanding investor access to a higher-quality yet still largely untapped segment of the global credit market, which offers diverse sources of potential income and the possibility of higher returns compared to corporate bonds with a similar risk profile,” she concluded.

Managed by State Street Investment Management’s active fixed income team, the PRAB ETF adopts a risk-aware top-down approach combined with bottom-up security selection designed to overweight the most attractive sectors and issuers.

PRAB adds to State Street Investment Management’s growing range of innovative public and private credit solutions, following the launches of the State Street® IG Public & Private Credit ETF (PRIV) and the State Street® Short Duration IG Public & Private Credit ETF (PRSD) in 2025. The range had attracted approximately $980 million in assets as of the end of February 2026.

How UCITS Corporate Bond Funds Behave in the Face of Financial Shocks

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International investors consider UCITS funds to be a solid, reliable vehicle with very clear regulation. Achieving this success has required the commitment of European authorities, which, following recent financial crises, have intensified scrutiny over the role of redemptions in bond funds as a potential amplifier of market stress. In particular, they have emphasized the need to strengthen liquidity management tools and market-wide stress testing frameworks. But have they succeeded?

According to the latest study published by the European Fund and Asset Management Association (EFAMA), although there were periods of higher redemptions, the magnitude of outflows in corporate bond funds remained relatively contained during three recent and clearly distinct financial shocks. For EFAMA, the results of the study contradict concerns expressed by financial regulators and international institutions, such as the FSB, the ECB, and the ESRB, which have argued that corporate bond funds — especially those offering daily liquidity — may amplify market stress during periods of turbulence.

“These concerns are based on the theoretical belief that a potential mismatch between the liquidity of fund assets and investors’ redemption rights could trigger forced asset sales (fire sales) and greater financial instability. However, our data indicate that such scenarios did not materialize in practice. Even during periods of high market volatility, fund managers appeared able to meet investor redemptions without resorting to disruptive asset sales or experiencing severe liquidity stress,” states the latest Market Insights report titled “Fund redemptions in periods of shock: evidence from outflows in UCITS corporate bond funds.”

EFAMA’s experts reached this conclusion after conducting a comprehensive analysis of daily and monthly redemption patterns of listed European corporate bond funds during the three most recent financial shocks — COVID-19 in 2020, the interest rate hikes of 2022, and the tariff shock of 2025 — assessing whether the observed redemption levels could pose a material threat to financial stability.

“This analysis suggests that risk-based supervision is more effective than regulation in addressing potential liquidity mismatches in the fund sector. Rather than applying broad measures across the entire fund universe, it may be more effective to focus regulatory attention on specific groups of funds that are structurally more exposed to the risk of extreme outflows,” highlighted Federico Cupelli, Deputy Director of Regulatory Policy at EFAMA.

Following the evidence
The organization explains that the evidence suggests that, at least in the cases analyzed, corporate bond funds acted as relatively stable investment vehicles rather than becoming sources of systemic risk. For example, although the analysis shows that the largest monthly fund redemptions ranged between 3% and 6% of the previous month’s net assets across all observations, ESMA’s stress test scenarios assume redemptions of 22% in a single week. “These results invite a more nuanced view of the role of corporate bond funds in financial stability debates and suggest that current liquidity management practices are more robust than sometimes assumed,” EFAMA notes.

In fact, they argue that the entire debate about the role of bond funds should be framed within a broader context, as investment funds are not the only holders of bonds. “Other key players, such as central banks, banks, pension funds, insurers, and sovereign wealth funds — among others — represent a much larger share of fixed income holdings compared to investment funds,” they point out.

Finally, they emphasize that this analysis suggests that risk-based supervision is more effective than broad-based regulation in addressing potential liquidity mismatches in the fund sector. “Rather than applying broad measures across the entire fund universe, it may be more effective to focus regulatory attention on specific groups of funds that are structurally more exposed to the risk of extreme outflows,” they argue.

EFAMA’s proposal
Based on its previous analysis, EFAMA has identified several principles that supervisors should take into account when overseeing funds:

  1. The notion of liquidity mismatch used by supervisors to identify vulnerabilities in the fund sector is inappropriate. In their view, rather than examining how much investors can redeem over a given period according to the fund’s rules, supervisors should consider how much outflow volume a fund can reasonably expect based on its historical behavior.

  2. Fund subcategories, such as investment grade and high-yield corporate bond funds, are not homogeneous categories. Therefore, they do not consider it appropriate to limit the analysis to their aggregate behavior (for example, by stating that “high-yield corporate bond funds exhibit structural liquidity mismatches”). “A more granular analysis is needed to identify those funds that are more vulnerable to liquidity shocks. Similarly, in top-down stress test scenarios, it is not appropriate to assume that all funds within a category will face similar levels of redemptions. Stress test exercises based on these assumptions are unlikely to accurately identify where vulnerabilities truly lie, if they exist,” they argue.

    3. It is relatively rare for a fund to experience daily outflows exceeding 3%. “This means that, in most cases, asset managers do not face sudden and significant outflows that could trigger forced asset sales. Moreover, large outflows are usually driven by the exit of an institutional investor from the fund,” they explain. In such cases, they note that the investor is typically required to provide sufficient advance notice to the manager so that preparations can be made for the withdrawal. For this reason, persistent daily outflows above 3% could be an indication of stress in a fund and may warrant closer supervisory attention.