James Williams, Hedgeweek

ABN AMRO Investment Management launches two Basic UCITS ETFs… UCITS inflows reach EUR71bn for January

ABN AMRO Investment Management has launched the first two ABN AMRO Basic UCITS exchange-traded funds reported AssetServicingTimes this week. Both have been listed on Euronext Amsterdam.

CACEIS has been awarded the fund administration mandate. Both funds are physical ETFs that invest in a basket of shares to replicate the underlying index. Neither fund is engaged in securities borrowing and lending, thus removing the threat of counterparty risk. 
 
Bart Mantje, director at ABN AMRO Investment Management, was quoted as saying: “We are delighted to be able to offer these high quality investment solutions to the market. We believe that ABN AMRO Investment Management, combined with the advanced ETF fund administration services of a leading provider like CACEIS, demonstrates our willingness to respond to the market’s demands for simple and transparent investment opportunities”.

“The CACEIS group is also strengthening its commitment to the entire Dutch market, as our new banking license enables us to greatly extend the range of services available to clients through our Amsterdam office,” added Joseph Saliba, deputy CEO of CACEIS.

Massachusetts-based Granahan Investment Management is set to launch its first directly managed UCITS-compliant fund reported Citywire Global this week. The Irish-domiciled fund will be called the US Focused Growth fund and will partly be based on the strategy used in the firm’s Small Cap Focused Growth fund. The full focus of the fund is not yet known at this stage.  The Small Cap Focused Growth fund has been available to US investors since August 2007 and targets sustained growth of 15 per cent plus over a near- to mid-term investment horizon and is lead by Andrew Beja. Beja will also oversee the running of the UCITS fund.

Net sales of UCITS rose substantially in January but equity funds saw a reduction in net inflows according to the latest report published by the European Fund and Asset Management Association (EFAMA). Figures in the report show that inflows rose dramatically from EUR14bn in December to EUR71bn in January. By comparison, equity funds saw a month-on-month reduction with inflows falling from EUR15bn to EUR11bn. Net sales of long-term UCITS increased from EUR27bn to EUR42bn.

Commenting on the figures, Bernard Delbecque, Director of economics and research at EFAMA said: “UCITS recorded in January 2014 the highest monthly net sales since the onset of the global financial crisis, and this in an environment characterised by falling long-term interest rates, continued low global inflation and rising stock market uncertainty reflecting tensions in several emerging markets.”

Schroders UCITS-compliant GAIA Cat Bond fund, which employs a catastrophe bond strategy, continues to attract strong inflows from investors reported Artemis.bm this week. The fund has seen its AuM grow from USD100mn on 21st October 2013 to USD430mn by 24th January 2014 but as Artemis points out, strong growth comes with issues of capacity. Simply put, there isn’t enough catastrophe bond issuance within the market to allow cat bond funds like the Schroders GAIA Cat Bond fund to absorb available investor demand. The firm’s senior executives are believed to be reaching the point where the fund will need to be soft closed as a result.

Massimo Tosato, Global Head of Distribution and Executive Vice Chairman at Schroders was quoted as saying to analysts: “We manage capacity, as you know, very carefully. It’s part of the quality of our offering and we are very careful in continuing managing it on a day-to-day basis.”

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