Some €34bn of these flows were into what the firm describes as ‘medium to long-term assets’, with AUM for the year reaching double the amount seen in 2023. For the final quarter of the year, net inflows reached €20.5bn, which included €18bn into medium to long-term assets.

Within ‘medium to long-term assets’, Amundi said most of the flows over the last quarter came from ETFs at €10.5bn, while actively-managed funds pulled in €5.5bn on a net basis. Actively-managed fixed income strategies proved most popular, with gross flows of €9.1bn.

The retail segment of Amundi’s business experienced its highest level of net inflows since 2021 at €11.5bn, with third-party distributers pulling in €12.7bn of capital. The institutional arm of the business achieved net inflows of €7.1bn, with €10.8bn coming from medium to long-term assets.

See also: Amundi launches private credit fund with First Eagle

Market performance and currency moves accounted for €140.1bn throughout the course of the year, and €28.1bn during the final quarter.

In terms of assets under management, ETFs reached €268bn by the end of December, marking a 30% year-on-year increase. Asian assets under management rose by 17% to €469bn, with €28bn in inflows throughout the course of the year. Amundi’s third-party distribution arm grew by 27% year-on-year to reach €401bn, while fixed income capabilities amounted to €1,190bn in assets under management.

Overall, Amundi’s total AUM increased by 10% over the year, and by 2.2% over the past quarter, to a record high of €2,240bn.

From a business perspective, adjusted net income during Q4 reached €377m, marking a 20% increase compared to the same time period in 2023. Adjusted net revenues over the quarter amounted to €924m, a 14.6% uptick compared to Q4 2023.

Valérie Baudson, chief executive officer, said: “2024 was a record year for Amundi, both in terms of results and activity. Our net income has reached €1.4bn and our net inflows have doubled compared to 2023. Our assets under management are at an all-time high, at more than €2.2trn, thanks to very dynamic inflows in several strategic areas, such as third-party distributors, ETFs and Asia. We have also confirmed and expanded our leading position in fixed income strategies.

“Our cost/income ratio, at the best level in the industry, is already in line with our 2025 target. This strong financial performance allows us to propose an increased dividend, offering an attractive return for our shareholders.”

Last year, corporate bonds achieved stable returns and rocketed in popularity, following expectations of falling interest rates across most developed economies. As such, the asset class is entering 2025 at tighter spreads than markets have seen for some time, but also with more attractive yields as interest rates reached highs not seen in several years.

The performance of government bonds has been more volatile, according to industry commentators, and looks set to remain so. The election of Donald Trump as US president, combined with weaker economies across western Europe, means that while interest rate cuts are virtually inevitable, the timing and scale of them is relatively unknown.

Iain Buckle, head of UK fixed income at Aegon Asset Management, says: “We expect bond markets to remain volatile in 2025. The market currently expects a further 75 basis points of cuts from the US Federal Reserve over the next 12 months. The broader US economy still seems robust, however, and those 75 basis points of expected cuts could look optimistic if the labour market remains resilient.

“The political backdrop in the US will also drive volatility, given the market assumes a Trump presidency will lead to looser fiscal policy and higher inflation. We will learn more as he takes office, and the reality may not be what the market has implied. But it’s likely the style of his presidency will only add to the uncertainty and volatility in markets.”

David Knee, deputy CIO of fixed income at M&G Investments, agrees that Trump’s election will increase volatility across markets, as investors anticipate how his second administration pans out.

“The first Trump presidency showed what Trump said he would do and what he actually did was very different,” he reasons. “Bond markets will be watching for key policies such as tariffs, tax and immigration, which could potentially reignite inflation and limit the ability of the Fed to act, as well as add to already growing deficits.”

Over in Europe, Buckle says the outlook is “slightly more certain”. “Core European economies have been struggling for some time, negatively impacted by a weak Chinese consumer and growing competition from within China itself.

“We expect the European Central Bank (ECB) to continue to cut rates, with 125 basis points of cuts expected by the end of the year. It would take a further deterioration in the outlook for the market to price in further cuts, but that is certainly a possibility as we learn more about US tariffs early in 2025.”

To read more on the outlook for government bonds, credit, equities, emerging markets consolidation and Consumer Duty, visit the January edition of Portfolio Adviser Magazine

The cautious market surrounded the UK Budget at the end of October and US election at the beginning of November. However, as the future plans crystallised, investors regained some faith, with both equities and fixed income returning to positive flows.

See also: ARC: Inflation leaves private portfolios 12% below 2021 levels

Fixed income managed sales of £524m in November after losing £742m in December. Equities began a slight comeback in the month by attracting £243m, but have a long climb ahead to bring back the £6.6bn lost in September and October.

UK equities, however, continued to experience outflows in November of £552m. While the sector’s sales remain in the red, it was the lowest level of outflows since August. North American equities saw the most faith from investors, with £428m in inflows.

See also: Calastone: Equity funds pull in record £27.2bn inflow in 2024

Miranda Seath, director of market insight and fund sectors at the Investment Association, said: “Investors will be watching closely to see what the year ahead holds. Trump’s pro-business agenda is likely to fuel US growth further, potentially leading to higher inflation.

“However, the prospect of uncertainty lingers, as potential tariffs could significantly impact global trade. In the UK, weaker economic data, combined with the introduction of national insurance contributions for businesses may also lead to price rises. In this climate, both the Bank of England and Federal Reserve are likely to be cautious about cutting rates.”

Instead, UK adults hold an average of 50% of their wealth in property and 15% in cash.

In comparison, US retail investors hold almost four times the amount (33%) in equities and mutual funds (outside of pensions), and just 26% in property.

With UK adults holding some £14trn in total assets, abrdn has urged the government to take action to address the UK’s risk culture and boost capital markets.

The firm’s analysis suggests that if UK adults raised their participation in investments to US levels, it could unlock up to £3.5tn for capital markets.

See also: London Stock Exchange sees fewer than 20 IPOs in 2024

James McCann, deputy chief economist at abrdn, said: “Investing culture is a very real part of American life. As an economist who has lived and worked in both the UK and the US, I have seen first-hand the stark differences in attitudes between the two countries around participating in financial markets.

“Equity ownership is more common in the US, where households hold a much greater share of their wealth in stocks and shares compared to their UK peers.

“Culturally, there is a greater focus on using financial markets to build financial independence in the US. I have been particularly struck by the prominence of the FIRE movement – Financial Independence Retire Early.”

Xavier Meyer, CEO Investments at abrdn, added that the UK is “streets behind many other developed countries” in terms of retail participation.

“Establishing a national culture of long-term share ownership will be crucial if we want to ensure healthy capital markets and shore up individuals’ long-term savings. We need a virtuous circle of good regulation, good products and both institutional and retail participation.

“Getting the UK investing is a critical challenge for society and, as an asset manager and investment platform owner, we aim to be part of the solution.”

See also: CIOs name trade wars and concentration risk as 2025’s top concerns

Meanwhile, interactive investor CEO and abrdn COO Richard Wilson believes that scrapping stamp duty on UK shares could provide a “big bang moment” to encourage more of the population to engage with the stockmarket.

“If stamp duty wasn’t a barrier to investing, why is it that we are losing systematically to the markets that don’t apply it? 

“Sweden, famed for its personal investing culture, applied a Financial Transaction (FTT) Tax of 0.5% between 1984 – 1991. Having removed FTT, the market has grown and the burgeoning activity in Swedish capital markets is enough to make the rest of Europe blush, if figures compiled by New Financial earlier this year are anything to go by.”

Though he joined PGIM less than two years ago, he boasts a career in investment spanning more than two decades, having most recently worked at BNY Mellon as head of investment management EMEA and European distribution.

“Despite my strong American accent, I have focused on non-US markets since 2007 – so I have a good blend of experience across different roles and regions – mainly within the Bank of America Merrill Lynch world,” Shafer tells Portfolio Adviser.

“I have spent about 40% of my career on the client side, within the wealth management and fund selection world, and the other 60% within asset management distribution roles.

“I interned at broker dealers and wire houses at university back in the day. My father has been in the advisory industry for a long time, so I feel like this has always been my path. And, I have to say, I couldn’t be happier about it.”

See also: View from the top with Impax AM’s Ian Simm: Follow your heart

One of the reasons Shafer joined PGIM was because he saw it as “a brand on the rise” – and he has big growth plans for the firm. While it is a well-known name in the US, with a total of $1.3trn (£1.01trn) assets under management globally, the distribution head says the next plan of attack is to grow the business’s intermediary space across Europe, the UK and Asia.

“As an organisation, especially given our business model and our diversification, as well as the fact we invest throughout the cycle, we have the ability to grow across any number of markets,” he explains. “Our multi-affiliate model is the secret sauce of PGIM, offering fixed income, equities and, increasingly, alternatives into both private wealth, and eventually retail, spheres.

“So really we start there, and our mission statement is the same – whether you’re in the UK or Asia, and that’s to offer diversification and the best of PGIM, in a way that can be easily consumed by wealth clients and private banking clients.”

Read the rest of this article in the November issue of Portfolio Adviser magazine

The ETF will offer exposure to the 20 largest S&P 500 stocks, in what the firm said is an effort to provide European investors with a tool to better manage their market-cap exposure.

The ongoing fee is 0.2% and the ticker is SP20.

BlackRock said options available in this area have not kept up with how the market has developed, noting that in 2000 the entire US stockmarket was valued at $15trn, whereas now this is the value of the top eight companies only.

See also: BlackRock Sustainable American Income Trust changes name ahead of SDR

More importantly in the firm’s view, the top 20 largest companies in the S&P 500 have contributed more than two-thirds (68%) of the index’s return over the past three years.

BlackRock added the ability to easily access or customise US market-cap exposure in an ETF is required by various types of investor, including first-time investors, portfolio builders, institutional investors, and financial advisers.

See also: Invesco launches defence, cybersecurity and AI ETFs

Brett Pybus, head of iShares EMEA product strategy, said: “Now is the time for investors to rethink their market exposure.

“With this ETF, European investors are now able harness the power of growth and innovation within the largest US companies in a targeted way. The performance dispersion within the S&P 500 has created a need for precise exposure to US equities.” 

This article was first seen in our sister publication, PA Adviser

T. Rowe Price’s Nataline Terry tells Portfolio Adviser: “I went to university at Loughborough where I studied banking and finance and, after three years, I joined the City working at a private bank on their graduate scheme.

“It was there that I realised I enjoyed the marketing side of things, which actually, has been the case throughout most of my career.”

After holding marketing roles at the likes of Threadneedle Investments (now Columbia Threadneedle) and UBS Global Asset Management, as well as spending more than 18 years as a marketing director at BlackRock, Terry moved to T. Rowe Price in 2017. Almost five years into her role as head of EMEA marketing, she was asked to take on the role of distribution head for UK and Ireland.

“I had thought about it previously, but it had never felt like the right time to move. But at this point, I thought: ‘Why not?’. So, I moved across and I have been involved with leading the distribution team for two and a half years.”

See also: View from the top with SJP’s Justin Onuekwusi: It’s important to be a good communicator

Founded in 1937, T. Rowe Price is a global asset management firm providing equity, fixed income and multi-asset solutions. While the majority of its investment professionals are based in the US, the company has significant presence in the UK, with a team of 169. It also has investment professionals located in Australia, China, Japan, Singapore, Italy, Denmark and Switzerland.

A substantial portion of T. Rowe Price’s equity assets under management is concentrated in US equities amounting to $728.1bn (£551.5bn). However, the firm also manages $56.5bn in global equity funds, $29.4bn in emerging market equities and $109.8bn in other international investments.

In addition, T. Rowe Price has a strong bond portfolio, managing $259bn invested in fixed income assets across various categories including government bonds, corporates, global high yield, emerging market debt and cash-type instruments.

As at the end of July, the firm has more than $1.5trn of assets under management.

So, no mean feat for Terry’s inaugural role as head of distribution UK and Ireland.

“For me, the role as a leader in both [marketing and distribution] camps is very similar. You’re inspiring a team, you’re setting a plan that meets the needs of the clients, you’re providing focus, you’re leading people and you’re managing. All of those attributes are the same, whether you’re in sales or marketing,” she explains.

“I have a wonderful sales team who receive exceptional feedback. I’m not there to do that role. My role is to enable them to do what they do as brilliantly and effectively as they can, to break down any personal challenges, to make things happen for our clients; I facilitate them doing the great job they do.

Read the rest of this article in the September issue of Portfolio Adviser magazine

The strong performance from bonds pulled overall sales of investment funds to £804m for the month, despite losses across equity, money markets, mixed asset and property. It marks the third month in a row that sales have stayed net positive.

Equity funds experienced the largest outflows for August, losing £408m. It marks the second month of outflows for the asset class, which dropped £50m in July after a June upswing of £1.2bn.

See also: Fairview’s Yearsley: China becomes ‘story of September’

Bonds, however, paint something of the opposite picture over the last three months, after moving largely in tandem with equity until June this year. August is the bond sector’s second month of inflows, after a £518m increase for July, yet it lost £1.2bn in the month of June. Government bonds were the largest draw for the asset class this month, with £837bn in inflows.

Miranda Seath, director of market insight at the Investment Association, said: “The Fed’s more aggressive interest rate cut of 50 basis points in September represents a significant milestone, as the Fed seeks to steer the US economy to a soft economic landing and markets responded positively. 

“We have moved past the peak of the rate cycle in the UK and the US and the outlook for equity markets is improving but investors remain cautious, continuing to opt for bonds over equities. Recent short-lived market volatility in the US at the end of July was partly fuelled by poorer than expected jobs growth. The path to a soft landing could be bumpy and this could bring new pockets of market volatility. And whilst UK investor confidence is improving investors are also waiting to see what the Autumn Budget holds. Post Budget we may see further adjustment to asset allocation.”

August did not show investor confidence in the home market as of yet, as UK All Companies experienced £629m in losses, the largest across all sectors. UK funds by region also dropped £829m. Just North America and global funds attracted investors overall for August, with regional inflows of £527m and £308m, respectively.

See also: ISS: Model portfolio sales quiet in first half of 2024

From an asset allocation perspective, we still prefer equity risk to bond risk. However, we see evidence of the US labour market beginning to slow under the pressure of interest rates at 5.5%. Though it does not seem like we are about to enter an imminent recession, the probability has certainly risen compared with six months ago. That leaves us with a maintained pro-equity stance but more watchful than previously. Within bonds, this translates into a preference for investment-grade corporate bonds rather than government bonds.

Most of our security selection risk comes from our equity portfolio of 40-50 high-conviction positions. Having benefited from the exceptionally concentrated markets over the past 18 months, our attention has now turned to where the market will go next. We still believe there is value in some of the mega-cap tech companies but we are also seeing exciting opportunities in other areas so have become more balanced in our risk-taking.

Many of the most attractive equities in the market today are those that have suffered as a result of the high interest rate environment, such as the US home improvement companies. Likewise, credit agencies have suffered from declining issuance levels over the past 18 months but should receive a boost to revenues as corporates take advantage of lower interest rates to refinance.

Finally, one of the overarching themes of the next decade will be rising geopolitical tensions across the globe. As multi-asset investors we can access this trend through gold, which provides not only a store of value but benefits from emerging market central banks buying significant amounts of the metal to diversify away from the US dollar.

Q: How do you see sustainable and ESG-oriented investing evolving from here?

Multi-asset, ESG-oriented investing adds an extra layer of complexity compared with single-asset funds, given the variety of securities. Equity ESG is well-established and many companies will have a dedicated ESG strategy that details the exposures you are interested in, such as scope 1-3 emissions.

Fixed income ESG is developing fast. As with equities, corporate disclosure is improving, meaning there is more scope to invest on an ESG-aligned basis. Government issuance of green bonds has also been helpful, although issues remain on the ringfencing of proceeds for environmental projects.

Alternatives are more difficult to analyse and subject to ‘greenwashing’ given the opacity of the structures and lack of proper disclosure. In these cases, it is important to spend time on due diligence and only align yourself with managers who are prepared to disclose the required information.

Finally, SDR/SFDR labelling will be helpful from a commercial sense. By calling out greenwashing and other mislabelling practices, those funds that are genuinely ESG-focused should benefit.

Read the rest of this article in the September issue of Portfolio Adviser magazine

In both the US and the UK, household-name companies remain private, including Monzo, Bloomberg, SpaceX and Chick-fil-A. Tech businesses have also trended towards the private route and in the UK, a string of public companies have been acquired by private equity firms.

Rob Morgan, chief analyst at Charles Stanley Direct, says: “There is a gradual realisation that public markets don’t have a monopoly on investment opportunities. Some of the most innovative and appealing companies are in the hands of private holders, often founders and exclusive bands of early investors in the case of relatively new businesses.

See also: Bain & Company: Private markets to make up 30% of AUM by 2032

“Many companies, especially growing tech firms, are staying private for longer. It’s not just earlier-stage businesses, though, the stockmarket has been getting progressively narrower for some time.”

From 2021 to 2023, global initial public offerings have fallen by 45%, according to management and consulting firm Bain & Company. However, it estimates that rate of private market assets under management (AUM) will increase 9-10%, making up 30% of all AUM by 2032.

Aaron Hussein, global market strategist at J. P. Morgan Asset Management, says: “The growing popularity of private markets has characterised the past couple of years. Reflecting on 2022, a challenging year for many investors that exposed the limitations of the traditional 60-40 stock-bond portfolio, this period also underscored the potential benefits of private market alternatives.

See also: Lazard launches Listed Private Markets fund

“As global stocks faced their steepest decline since 2008 and global bonds suffered their worst annual performance on record, private real assets such as transportation, infrastructure and timber stood out with impressive double-digit returns.”

Because private assets cannot easily be recreated on an index, they also provide a unique opportunity for active fund managers, who in the public market are fighting a battle against passive products.

Read the rest of this article in the September issue of Portfolio Adviser magazine

The quarter marks a turning point for equity funds, which have been unable to escape quarterly outflows for the past two years. The first three months of 2024 saw outflows of £1.6bn, with each quarter in 2023 experiencing outflows of near or above £4bn.

While UK equities remained firmly as net outflows for the second quarter of the year, all other regions rang into the net positive range, led by global equities with £2.7bn. In June, Europe ex-UK equities also attracted £868m as the European Central Bank called for a 25 basis-point cut to interest rates.

See also: Quilter sees 164% increase in core net inflows in H1 2024

Miranda Seath, director, market insight & fund sectors at the Investment Association, said: “June has seen a return to inflow as investors opted to allocate capital back into equities. Investor confidence has been building throughout Q2 2024 as inflation has calmed and, in the UK, we have seen the first base rate cut from the Bank of England since March 2020. This decision could help to improve confidence and flows as we head into the second half of 2024.

“However, recent movements on the global stage on the back of poorer than anticipated US employment data have highlighted the complexities of the macroeconomic environment. Whilst the health of the US economy has implications for all major markets, it’s critical that investors remain focused on long-term goals rather than short-term market fluctuations.”

See also: Arkaim Advisors to launch distressed debt hedge fund

The inflows to equities were matched by money market funds, with short term money markets gathering £1.5bn for the month. Fixed income, however, dropped £1.2bn in June, with the first half of the year now staying barely positive at £58m in net inflows. While the sector as a whole struggled, corporate bonds managed to be the third best-selling sector for June, collecting £770m.

“Investors thrive on greater certainty and in the UK, investor sentiment should be further improved by the new Government’s commitment to driving growth and maintaining fiscal responsibility. Following a prolonged period of outflow, we are beginning to see conditions that could give a boost to UK equities as we move into the autumn.”

Investors drew a net £207m out of UK equity funds, a third of the average amount that has been withdrawn during a month in the last three years. The numbers were boosted by a strong day following the election of the Labour Government, seeing inflows of £59m.

The performance for UK equities was supported by an overall £2.19bn in inflows to equity funds throughout July, the largest inflows since March of this year. Throughout 2024, investors have poured a net £13.5bn into equity funds, making it the strongest seven-month period of Calastone’s 10 years of recording.

See also: What has caused the global equity market sell-off?

Edward Glyn, head of global markets at Calastone, said: “One swallow doesn’t make a summer and we did still see outflows from UK-focused funds in July, but the improvement is consistent with the groundswell of positive commentary surrounding the investment case for UK equities.

“Growth indicators suggest the economy is outperforming its peers, while the arrival of a new government with a huge majority is in stark contrast to today’s political turmoil in many other major G7 countries and in the UK’s recent past. Last Thursday’s first cut in interest rates in four years also vindicated optimists who had begun to turn their attention back to their home market.”

North America made up over half of July’s inflows, at £1.12bn, while emerging markets shot up by £424m. Asia-Pacific was the only other geographical location to feel outflows for the month. Outside of equities, investors also took an interest in money market funds, adding £432m to the pot and £84m to fixed income.

See also: July fund performance: Small caps rebound in marathon month of politics

“UK households are sitting on record volumes of cash deposits worth £1.8trn, up £74bn over the last year alone. This reflects wage growth well ahead of inflation in recent months and it helps explain why investors have so much firepower to invest into funds at present,” Glyn said.

“Hopes for a soft landing for the global economy are seemingly unlocking some of that firepower for investment. Some markets, especially the US large caps, are already very expensive and have been extremely volatile in recent days, however, so investors must be alive to the risks of chasing high valuations higher.”