European winners amidst the carnage

Morningstar's latest European asset flow update for 2011 highlights which fund managers and sectors - in spite of European doom and gloom - came out on top.

Europe’s largest and third largest fund companies, JP Morgan and BlackRock, retained their positions in 2011 mostly due to their US dollar and British pound money market businesses, according to the report.

However, for 2011 as a whole, Franklin Templeton still looks like the big winner among Europe’s largest fund families with organic growth of more than 14%. But momentum slowed going into 2012, as the twin engines of Franklin’s European growth—Templeton Global Bond and Templeton Global Total Return—sputtered in
December and for the fourth quarter as a whole.

European investors took nearly €1 billion from the former and €500 million from the latter during the last three months of 2011, though the two funds still managed to end the year with more than €11 billion in new European money.

Funds in Morningstar’s global large-cap value equity category captured significant investor interest in December and took in €2 billion in 2011, making it the most popular equity-focused category. Funds including M&G Global Dividend, Veritas Global Equity Income, Newton Global Higher Income and DWS Invest Top Dividend likely benefited from their perceived safety - portfolios heavy on global blue chips-  and their focus on income in a yield-hungry environment.

Morgan Stanley INVF Global Brands was Europe’s most popular equity focused fund—both for December and for 2011 as a whole (up €1.7 billion). The fund, whose founding manager Hassan El Masry, departed in February 2009, posted an exceptional 2011, on both an absolute and relative basis, thanks to its exposure to
non-cyclical, cash generative businesses, especially in the tobacco industry.

Allocation funds M&G Optimal Income and Newton Real Return enjoyed good Decembers and finished 2011 with roughly €5 billion combined in new investor money—making the allocation asset class the only broad asset class in positive territory for 2011.

Both funds have sterling track records, evidenced by their 5- and 4- star Morningstar Ratings, respectively. The fund’s Morningstar analyst ratings of bronze and silver reflect our fund analysts’ positive views of these offerings.

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