The Pimco GIS Income fund has shot the global flexible-bond funds categories to the top of the tables for sales despite all its peers suffering outflows, while active equity funds have topped passive sales.
The fund landed €4.3bn inflows in September – the same total inflows for the entire Global Flexible Bond (USD Hedged) category, according to Morningstar data.
Following inflows of €31.1bn in the year to date, the Pimco GIS Income now holds €50.1bn. September is the best month for sales in the history of the fund, which launched to European investors in 2012 and mirrors the US-domiciled version of the fund.
“While its successful track record was built on the heavy exposure to US nonresidential mortgage-backed securities, the strategy is now more heavily focused on non-US developed and emerging-markets debt, including corporate bonds,” says Morningstar director for Emea editorial research Ali Masarwah.
Bonds dominated the popular categories with emerging markets and global categories completing the top three for inflows, attracting €3.6bn and €2.2bn respectively.
Franklin Templeton, Aegon, and Ashmore were the beneficiaries of emerging market inflows, while index funds from State Street led local-bond funds to have the strongest inflows since May 2013.
In equities, Eurozone and Japanese large-cap categories made the top 10 best sellers for September attracting €1.4bn and €1bn each. Those represent the month since October 2015 and a 30-month high for inflows respectively.
Masarwah notes active equity funds landed €7.7bn this year, compared to a relatively modest €1.4bn in index funds.
The trend is reflected in Q3 sales with €21bn going into active compared to €8.9bn for passive, but for the year to date passive sales remain ahead with €42.9bn in passive over €39bn in active.
“When using the organic growth rate as a measure of success, defined as flows percentage of beginning assets, passive open-end equity funds have clearly outpaced their active pendants,” Masarwah says.
Standard Life Investments Global Absolute Return Strategies continues to suffer outflows losing €636m in September.
However, Masarwah notes M&G Optimal Income landed its tenth consecutive quarter of inflows after heavy outflows in 2015 and 2016. “Investors have flocked back to this defensively positioned fund, which fared well during the fall of 2016 when bond yields spiked.”