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Difficult first semester - Trends-Tendances sur PC

Difficult first semester – Trends-Tendances sur PC

Overall, both pension savings funds and flexible funds have suffered sometimes painful setbacks over the past six months. However, some managers have proven to be more adept than others.

At the end of 2021, mixed funds represented more than 46% of assets recorded in funds marketed in Belgium, a significant and uninterrupted increase since 2011, when they still represented only 27% of assets under management. At the same time, total assets on the Belgian market had increased from 114 billion euros to more than 275 billion euros, with a volume invested in mixed funds which quadrupled from 32 billion euros to more of 128 billion euros. And in this category, pension savings funds represented just over 25 billion euros at the end of 2021.

At the end of 2021, mixed funds represented more than 46% of assets recorded in funds marketed in Belgium, a significant and uninterrupted increase since 2011, when they still represented only 27% of assets under management. At the same time, total assets on the Belgian market had increased from 114 billion euros to more than 275 billion euros, with a volume invested in mixed funds which quadrupled from 32 billion euros to more of 128 billion euros. And in this category, pension savings funds represented just over 25 billion euros at the end of 2021. However, the first half of 2022 was a very bad period for them, in a context of rising inflation. where both stocks and bonds suffered simultaneous declines in their stock prices. Pension savings funds, which are more limited in their ability to vary their allocation between asset classes, have thus suffered an average decline of more than 15% since the start of the year, with falls that have been more pronounced on dynamic funds (-16.5%) than on defensive funds (-12.7%). In terms of outstandings, however, there was no panic, with outflows remaining relatively limited. However, it must now be noted that the correction of recent months is likely to leave its mark since the five-year annualized performance of practically all products has shrunk to a trickle, with Argenta’s dynamic fund posting the best performance , at 2.6%. At the level of flexible mixed funds, which have a much greater capacity to change their allocation between asset classes, the performances were much more contrasted but generally better than pension savings funds, with an average decline of 11.6% for the fifty funds included in our sample. Here too, it was the most dynamic funds with greater exposure to equities that suffered the largest losses (-14.9%) while flexible funds (-11.34%), moderate (-11.35% ) or cautious (-9.9%) fared much better. Over a five-year horizon, the performance of flexible funds also collapsed towards 1.7% for the funds in our sample, with a better performance for dynamic funds (3.6%) than for conservative funds (0%). The best funds are now posting an annualized performance of around 5%. Within the different categories, however, there were significant performance differences between the different funds during 2022, in particular in the flexible category (which often has the most freedom in their allocation), with performances that range between -3.7% and -22.8%. At the level of assets, there was no capitulation either, with nearly half of the funds recording positive net subscriptions. However, a few products suffered massive outflows, notably BlackRock Global Allocation, Carmignac Patrimoine and M&G Optimal Income, which each saw their assets under management drop by more than 3 billion euros. At the top of the ranking for the first half of the year, we find Ethna-AKTIV, one of the funds that had best weathered the great financial crisis of 2008. It had been one of the most popular products among Belgian investors until 2015. Performance had tended to suffer in recent years due to low bond yields and an investment strategy that has always remained very cautious. Investors therefore tended to turn away from this product in favor of more aggressive funds, with assets under management falling from 11.6 billion euros at the end of 2015 to 2.1 billion euros at the end of end of June 2022. “The first part of the year was turbulent, comments Michael Blümke, senior manager of Ethna-AKTIV. We were very quick to take a defensive position when the support for fiscal and monetary policies began to s out of breath, which allowed us to limit the recoil.” In practice, this translated into a reduction in equity positioning in the early months of 2022, even before the outbreak of war in Ukraine. The management team also quickly positioned itself on the dollar, with a reduction in the sensitivity of the bond portfolio to the rise in interest rates. “For the time being, we continue to remain cautious on equities, in a context where earnings expectations have not yet been adjusted downwards, with margins which are still historically very high, further underlines Michael Blümke. We have spent most of June trying to make our portfolio even more resilient should a recession occur.” In our table opposite, behind the Ethenea fund, we find at the top of the ranking several funds which had tended to suffer in recent years. After reaching assets of more than 9 billion euros during the first half of 2018, M&G Dynamic Allocation had suffered from deep investor disenchantment due to a very cautious positioning on the American technology sector which had led to disappointing performances. between 2019 and 2021. Identical trajectory for DNCA Invest Eurose, whose assets under management had reached 5.7 billion euros in the first half of 2018, before collapsing due to a forced positioning on European assets, with a value approach against the tide of financial markets more obsessed with growth stocks. Among the funds that had performed very well during the rising market phase, some have rather tended to fall into line, such as R-Valor or Flossbach von Storch Multiple Opportunities, which have fallen by more than 10% since the start of the the year, which is hardly surprising since these products are traditionally very heavily exposed on the stock markets. But other products have more than confirmed their ability to weather crises, such as DWS Concept Kaldemorgen, DWS’s flagship flexible fund, whose assets have increased by more than 800 million euros. Similarly, BL-Global Flexible confirmed the quality of Guy Wagner’s management. “We continue to favor good risk diversification, with a stock market portfolio that favors good quality companies that have a competitive advantage that allows them to resist well during the most volatile phases on the markets”, explains the latter. The rest of the allocation favors emerging debt, European corporate debt and safe havens such as US sovereign debt or gold mines.

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