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James Williams, Hedgeweek

Global ETF/ETP market reaches AuM record of USD2.64tn… Lyxor launches second senior debt fund…

Schroders this week announced that assets under management in Schroder ISF Global Multi-Asset Income have surpassed USD5bn. The fund only launched just over two years ago in April 2012 with flows coming from Asia, Europe, Latin America and the Middle East.

It’s a significant milestone to reach.
The fund, which aims to provide sustainable income by investing in high quality income generating securities across a range of asset classes, regions and sectors, is managed by Aymeric Forest and Iain Cunningham. The objective is to pay a distribution of 5 per cent annually in monthly or quarterly installments.
Aymeric Forest, Head of Multi Asset Investments, Europe and Lead Fund Manager of Schroder ISF Global Multi-Asset Income at Schroders, said: “We have a diversified portfolio across a range of asset classes and regions, and we employ an active and flexible approach, which allows us to continue to deliver our yield objective of five per cent per annum.”
Forest added: “Equities remain our preferred asset class with continued focus on value and dividend paying stocks in a moderate growth environment. Within fixed income, further easing from the European Central Bank (ECB) has caused European bond yields to rally to record lows; we saw this as an opportunity to rebalance our investment grade exposure towards North America and Asia. With a more positive outlook for emerging markets after the fall-out from US tapering, we have increased exposure in these regions. Our global and unconstrained approach allows us to capture diverging regional growth and focus on sustainable income opportunities.”
Global ETFs and ETPs attracted USD34.8bn in net new assets in June according to ETFGI, a London-based research and consultancy firm. This market has now attracted USD126.6bn year-to-date, outstripping the previous high of USD106.4bn reached at the same point in 2012. Combined with positive performance in the first half of the year, the global ETF/ETP industry has seen total assets under management reach a record high of USD2.64tn.
According to ETFGI’s end H1 2014 Global ETF and ETP industry insights report there are now 5,359 ETFs/ETPs with 10,401 listings from 219 providers listed on 59 exchanges.
“In June investors invested almost all net new money into equity exposures with the US and emerging markets being the preferred allocations. The S&P 500 index ended up 7% at the end of Q2 2014, closing at an all-time high (1963) on June 20th. Internationally, developed markets gained 2% and emerging markets are up 4%. The positive equity market performance has helped to improve investor confidence during the first half of 2014.” said Deborah Fuhr, Managing Partner at ETFGI.
Following the launch of its EUR275mn European senior debt fund in July 2013, Lyxor is launching its second commingled European senior debt fund. The Lyxor European Senior Debt Fund is an AIFMD-compliant SICAV-SIF domiciled in Luxembourg and is open to subscription by professional investors for a period of 12 months from 30 June 2014.
The fund invests mainly in floating rate senior secured loans issued by European companies to finance acquisitions and corporate growth. The fund will provide investors with exposure to a market that is characterised by increasing loan issuance numbers so far this year and that continues to feature attractive pricing characteristics and a competitive risk-return profile.
Thierry de Vergnes, head of debt investments at Lyxor, said: “By investing in European loans, investors get exposure to high yielding debt with a floating rate income profile that ranks at the top of the capital structure of the issuer. The current issuance dynamic of the market will enable Lyxor to build a well-diversified portfolio of European loans.”
The fund will target a return of 3M Euribor + 5.5 per cent to 6.5 per cent per year before fees over six to eight years. This will include quarterly income distributions (targeting 3M Euribor + 4.5 per cent to 5.0 per cent before fees) for distributing share classes.
Societe Generale Securities Services (SGSS) in Luxembourg has been mandated by Swiss Life Asset Managers to provide custody, fund administration and record-keeping services for a new real estate fund according to the Societe Generale Bank & Trust website.
SGSS already provides Swiss Life Asset Managers with fund administration and securities lending services for French UCITS and domiciliation, custody, fund administration, fund distribution and securities lending services for Luxembourg UCITS.
SGSS was selected for its recognised expertise and competitive offering for alternative investment funds and its capacity to provide simplified access to the local market as well as to multiple markets abroad through its top-quality distribution platform. In addition, SGSS provides a reporting package to assist alternative fund managers with producing the required regulatory reports to be filed with local regulators.
A leading securities services provider in the Luxembourg financial market, SGSS provides a complete range of securities services for asset managers and institutional investors, including settlement, custody and trustee services, fund administration, middle-office services, as well as securities lending, fund distribution and issuer services.
Swiss Life Asset Managers has more than 150 years of experience in managing the assets of the Swiss Life Group. As at 31 December 2013, it managed EUR104.1bn in assets for the Swiss Life Group.

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