Almost half of the 20 largest actively managed funds in Europe in 2012 have disappeared from the same ranking in 2017, as portfolio manager departures, the hunt for yield and upheaval in Asian markets transformed the continent’s investment industry.

Nine new funds have entered the top-20 chart over the past five years, pushing out old favourites including Pimco’s Total Return and Diversified Income funds, according to figures compiled for FTfm by Morningstar, the data provider.

Pimco’s Total Return fund, which ranked as the third-largest fund in Europe five years ago, no longer appears in the top 20. Investors fled the fund on the back of the departure of Bill Gross, the famed bond investor.

Invesco Perpetual’s High Income and Income funds also fell out of the top 20 after Neil Woodford, who ran the products, quit Invesco in 2013 to set up his own asset management company.

Ali Masarwah, a director at Morningstar Europe, said: “You get celebrities among fund managers. If the celebrity exists, money will usually flow out of the funds.”

Several funds rose up the charts as investors went on the hunt for income because of the low interest rate environment, according to the data. This included Pimco’s Income fund, which did not appear in the 2012 ranking but surpassed €50bn in assets in September and is now Europe’s largest mutual fund.

JPMorgan’s Global Income fund, DWS Top Dividende and Nordea’s Stable Return were also entrants to the ranking, each appearing in the top 10.

Massimo Greco, head of European funds at JPMorgan Asset Management, said: “European investors are seeking income as a result of demographics and macroeconomic factors that keep interest rates low.”

Chris Chancellor, a partner at Mackay Williams, the asset management consultancy, added: “Since the end of the crisis, we’ve seen a whole new type of fund rise up the rankings: those offering some kind of solution, whether that is income or a stable return.

“More building-block options, such as the core equity funds, have fallen out of favour for the time being and this [has led to] some funds falling out of the rankings.”

According to the data, the dominant position of Franklin Templeton, the US fund house, has been challenged in Europe over the past five years. In 2012, the emerging markets specialist was home to Europe’s largest actively managed fund, the Templeton Global Bond vehicle run by Michael Hasenstab. But this has dropped to 15th position over the past five years.

Its Templeton Asian Growth fund also fell out of the top 20 since 2012. The company has suffered because of a sell-off in emerging markets during 2013 and 2014, and concerns about performance.

“Franklin has had a pretty rough few years. Performance was quite poor relative to the peers,” said Mr Masarwah, adding that investors continue to pull money from the asset manager.

Aberdeen Global Emerging Markets Equity, Axa’s US short duration high yield, AllianceBernstein’s American Income and M&G’s Recovery funds also fell out of the top 20 over the past five years.

While many of the largest funds in Europe are run by huge asset managers, the data revealed some smaller investment houses are doing well. Two funds from Carmignac, the French boutique, and an equity fund run by Terry Smith, who set up a UK-based asset management company in 2010, appear in the top 20.

Published Date:2017-11-13