Fixed-income strategies see big asset flows while equities see big outflows in Q2
Institutional flows were broadly positive for fixed income strategies in the second quarter of the year, according to the just-released eVestment Q2 2021 Traditional Asset Flows Report.
US bonds saw inflows of +USD68.6 billion: +USD50.0 billion for active strategies and +USD18.6 billion for passive strategies. Non-US bonds also saw inflows of +USD31.9 billion: +USD24.0 billion for active strategies and +USD7.9 billion for passive strategies.
Across all long-only traditional strategies tracked by eVestment, asset managers reported Q2 2021 institutional assets under management of USD36.2 trillion. Net institutional flows were negative for the quarter, totalling -USD15.9 billion in Q2 and but are positive over the past four quarters at +USD88.0 billion.
Long-only active equity managers endured another quarter of outflows in Q2 2021, with investors removing -USD100.9 billion from active equity strategies. Global large cap value and growth, ACWI ex-U.S. small cap growth and emerging market all cap growth were among the few active segments to see net institutional inflows. China A-shares and Greater China equity managers also saw flows turn negative in Q2 after a number of quarters of net inflows.
Institutional flows for passive equity products totalled -USD21.9 billion in the most recent quarter. Passive US large cap strategies posted significant institutional redemptions, as did passive global, EAFE and US small cap equity strategies. Passive ACWI ex-U.S. and passive US all cap products were the major winners of assets in Q2 with inflows of +USD12.5 billion and +USD11.9 billion, respectively.
Global multi-asset strategies experienced net institutional outflows of -USD7.0 billion in Q2 2021. This compares to net inflows of +USD1.8 billion for US multi-asset strategies. US balanced products brought in the bulk of net allocations during the quarter with flows roughly flat for US tactical asset allocation strategies. Redemptions were widespread for global multi-asset products measuring -USD4.0 billion for diversified growth funds, -USD2.4 billion for GTAA managers and -USD1.7 billion for global balanced products.
UK-domiciled investors were net redeemers of assets from UK equity and fixed income managers in Q2 2021. Outside of domestic markets, UK investors allocated toward global fixed income (+USD2.5 billion), US equity (+USD2.0 billion), Europe fixed income (+USD1.5 billion), Asia-Pacific equity (+USD1.2 billion) and U.S. equity (+USD1.1 billion) in Q2 2021.
Investors domiciled in Asia, excluding Japan, allocated +USD5.0 billion to US fixed income and +USD0.8 billion to global fixed income strategies in Q2 2021. Within Ui bonds, MBS managers were the clear primary beneficiary of these flows, whereas allocations toward global fixed income were more widely dispersed.