ipreo regional flow of funds series1igflvrxbfpltom39pcvljnx.wpengine.netdna-cdn.com/... · increase...

IPREO REGIONAL FLOW OF FUNDS SERIES

Southern Europe

Q4 2017

Flow of Funds: Southern Europe

Market Overview

Ownership by Investor Region vs Issuer Region Ownership by Investor Style vs Issuer Region

Institutional Investment Flow Highlights

• Southern European equities continue to experience net inflows for the fifth consecutive quarter (+$865.2M) although the pace of investment has decreased significantly compared to Q3 2017 (+$11.5B). The significant decrease in net inflows in this region was driven by the heavy outflows from Spain (-$2.1B) whilst increased investment into Italy (+$2.8B), Greece (+$77.7M), and Portugal (+$51.9M) kept the Southern European region in positive grounds (+$865.2M) in Q4 2017.

• Within the region, the two main drivers of outflows and inflows are Spain (-$2.1B) and Italy ($2.8B) respectively. Notably, Spain has seen heavy outflows in the review period after a year of consecutive inflows, with Q3 2017 being the highest in the past year (+$5.6B). However, the Spanish economy remained strong despite political uncertainty towards the tail end of 2017 due to the Catalonia crisis. “In the fourth quarter, the economy successfully defied fears of an abrupt slowdown in activity following a failed secession attempt in Catalonia, with the domestic economy recording a healthy pace of growth. According to more comprehensive GDP data released by the National Statistical Institute, economic growth was 0.7% from the previous quarter in Q4, matching the revised 0.7% increase recorded in Q3 (previously reported: +0.8% quarter-on-quarter) and the preliminary release for Q4 data. The fourth-quarter print drove full-year growth to 3.1% in 2017, a notch below the 3.3% increase recorded in 2016.” (Mar-2018; FocusEconomics.com).

• Italian equities have received net inflows into the region for five consecutive quarters although there was a significant drop in the pace of investments into the region in Q4 2017 (-42.0% quarter on quarter). Several Blackrock Group entities are within the top buyers of the region, which is in line with the positive view on the market in Italy, with Karim Chedid, BlackRock’s Investment Strategist, commenting in Q1 2018 that, “Italian equities have outperformed both the eurozone and U.S. equities over the past 12 months, as shown below, supported by the region’s above-trend economic expansion. Currently trading at 20% valuation discount to their 5 year average Italian equities do not look expensive relative to their historical norms. The bottom line: Markets are familiar with political uncertainty in the eurozone, but the fact that economic fundamentals have been on an improving trend may help limit any downside for Italy … Markets have shown li ttle reaction to Italian political risk, despite the uncertainty of the outcome and lack of clarity around what policies or changes any outcome would bring.”

• Both Portugal and Greece saw net flows of +$51.9M and +$77.8M respectively. Portuguese equities saw net inflows from all regions with North America as the largest buying (+$24.9M) contrary to the trend observed in Greek equities where North American investors were net sellers, divesting -$88.8M. Western European equities as a whole saw net buying in Q4 2017 although there was a noticeable decrease in the pace of investment.

• Overall, Western European equities remained in positive territory with net inflows of +$20.9M largely driven by heavy buying from North American investors (+$18.4M) followed by UK & Ireland (+$2.4M). North American investors were, however, net sellers of Southern European stock by -$1.7M. The selling by Western European investors is largely linked to the large disposal of Spanish stocks (-$1.6M) and Italy to a lesser extent (-$10.0M) while remaining bullish in Portugal and Greece. Michael Bell, JP Morgan Asset Management’s Global market strategist, comments review of markets over the fourth quarter of 2017, “Furthermore, politics has given European investors reason to pause for breath, with the Catalonian independence referendum on 1 October weighing on the relative performance of Spanish equities since August. Since the start of October, Italian equities have also given up a little of their outperformance for the year as investors start to look ahead to the Italian elections next year, although it should be noted that they have still delivered one of the strongest returns this year, up 17%.”

• From a style perspective, this region continues to be largely dominated by Value, Growth and Index investors controlling 32.3%, 30.7%, and 20.2% of the ownership in Southern European equities respectively. Both Value and Growth investors were net buyers in the review period albeit Growth showing a significant drop in the pace of investment, increasing marginally by +$493.4M in the quarter (compared to +$4.1B in Q3 2017). Conversely, Value investors continue with a bullish trend to further increase their exposure to the region with net inflows of +$2.0B, a +14.4% increase compared to the previous quarter. Value-driven investors were buying across Spain (+$155.0M), Greece (+$38.2M) and Italy ($2.1B) while selling out of Portugal (-$165.9M). “Europe’s is a big value index, and with the pick-up in bond yields, the value rotation is just starting,” Emmanuel Cau, a London-based Equity Strategist at JPMorgan Chase & Co, cited recently. Index was notably the surprise in the quarter as this invesmentt style has turned bearish in Southern European stock despite the heavy buying in the previous quarters. The divestment from this investment style can be associated to French-Index investor, Lyxor Asset Management, which disposed of -$1.8M in the quarter.

©2018 Ipreo. All rights reserved. None of Ipreo, its affiliates, or any of their third party providers is liable for any informational errors, incompleteness, or delays, or for any actions or decisions taken by any person as a result of any information contained herein.

-4,000.0

-2,000.0

0.0

2,000.0

4,000.0

6,000.0

8,000.0

10,000.0

N. America W. Europe UK & Ireland Scandinavia Asia MENA Other

Net Change ($M) by Region

Q1-17 Q2-17 Q3-17 Q4-17

-2,000.0

-1,000.0

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

AggGr./Growth

DeepVal./Value

Index GARP Specialty Yield Alternative

Net Change ($M) by Style

Q1-17 Q2-17 Q3-17 Q4-17

WEU

E. Europe 0.1%

Rest of World 0.6%

MENA 1.2%

Asia 0.9%

Scandinavia 16.4%

UK & Ireland 15.3%

W. Europe 28.3%

N. America 37.2%

Southern Europe

E. Europe 0.3%

Rest of World 1.1%

MENA 1.4%

Asia 1.6%

Scandinavia 6.8%

UK & Ireland 18.4%

W. Europe 35.1%

N. America 35.2%

Southern Europe

Alternative 4.1%

Yield 2.5%

Specialty 1.7%

GARP 8.5%

Index 20.2%

Deep Val./Value 32.3%

Agg Gr./Growth 30.7%

WEU

Alternative 3.0%

Yield 2.5%

Specialty 1.1%

GARP 6.1%

Index 17.7%

Deep Val./Value 36.8%

Agg Gr./Growth 32.8%


Most Bought & Sold Stocks


0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17

Active vs. Passive Investment (% Chg)

Active Passive

71.0% 75.6%

29.0% 24.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Southern Europe WEU

Ownership by Orientation vs Issuer Region

Active Passive

-2,000.0 -1,000.0 0.0 1,000.0 2,000.0 3,000.0 4,000.0

Basic Materials

Consumer Goods

Consumer Services

Energy

Financials

Healthcare

Industrials

Technology

Utilities

Most Bought & Sold Sectors - Active Investors

-1,000.0 -500.0 0.0 500.0 1,000.0

Basic Materials

Consumer Goods

Consumer Services

Energy

Financials

Healthcare

Industrials

Technology

Utilities

Most Bought & Sold Sectors - Passive Investors

Country / City

Total Equity

Assets ($M)

Value

($M)

Activity

($M)

#

Firms Country / City

Total Equity

Assets ($M)

Value

($M)

Activity

($M)

#

Firms

United Kingdom (London) 3,173,386.7 79,252.4 988.1 229 United Kingdom (London) 3,173,386.7 79,252.4 988.1 229

France (Paris) 611,278.2 43,082.9 -497.4 174 United States (New York) 3,737,608.0 31,433.5 218.5 210

United States (New York) 3,737,608.0 31,433.5 218.5 210 France (Paris) 611,278.2 43,082.9 -497.4 174

United States (San Francisco) 2,939,951.7 27,440.6 -7.5 33 Spain (Madrid) 78,112.3 19,125.6 527.1 89

United States (Malvern) 2,949,094.9 25,055.7 1,233.7 1 United States (Boston) 4,365,259.2 21,532.0 -138.4 58

Norway (Oslo) 697,650.0 24,456.7 45.7 14 Canada (Toronto) 878,354.5 5,062.0 24.6 55

Spain (Barcelona) 32,703.7 23,938.3 -233.1 19 Switzerland (Zürich) 383,936.7 4,960.2 163.5 51

United States (Boston) 4,365,259.2 21,532.0 -138.4 58 Luxembourg (Luxembourg) 48,716.1 2,789.8 3.2 48

United States (Los Angeles) 1,379,114.6 20,025.3 308.5 18 Germany (Frankfurt) 373,073.5 10,565.4 -1,736.3 47

Italy (Milan) 80,625.5 19,272.1 -129.6 43 United States (Chicago) 954,902.0 5,703.8 676.5 45

Spain (Madrid) 78,112.3 19,125.6 527.1 89 Italy (Milan) 80,625.5 19,272.1 -129.6 43

Germany (Frankfurt) 373,073.5 10,565.4 -1,736.3 47 Sweden (Stockholm) 377,821.3 4,555.9 110.1 42

United Kingdom (Edinburgh) 327,297.8 10,076.1 319.8 18 Switzerland (Geneva) 122,396.5 2,569.0 25.6 41

United States (Austin) 442,715.6 7,210.8 85.9 6 United States (San Francisco) 2,939,951.7 27,440.6 -7.5 33

Italy (Turin) 8,357.7 6,988.5 -397.3 5 Japan (Tokyo) 841,926.8 1,220.1 27.3 33

Includes Active & Passive Investors 369,456.1 587.6 964 Includes Active & Passive Investors 278,565.4 255.4 1,198

Top Invested Cities

MO

ST IN

VES

TED

MO

ST IN

VES

TOR

S

Security Industry Change $M

Banco Bilbao Vizcaya Argentaria, SA Banking 1,349.1

UniCredit S.p.A. Banking 959.1

Pirelli & C. S.p.A. Automotive 776.0

Bankia S.A Banking 386.2

Enel S.p.A. Utilities 367.7

CaixaBank S.A. Banking 359.5

Mediobanca Banca di Credito Finanziario S.p.A. Banking 247.2

Repsol S.A. Oil, Gas and Coal 229.0

Gima TT S.p.A Industrial Equipment 212.0

Aedas Homes, S.A.U. Homebuilding 206.0

Includes Active & Passive Investors 5,092.0

BO

UG

HT

Security Industry Change $M

Amadeus IT Group S.A. Computer Software and Services -1,486.9

Banco Santander S.A Banking -944.8

Abertis Infraestructuras S.A. Transportation -875.7

Red Electrica Corporacion S.A. Utilities -411.2

Endesa S.A. Utilities -345.7

Leonardo – Società per azioni Aerospace and Defense -321.6

Industria de Diseno Textil S.A. Retail -309.0

Axiare Patrimonio SOCIMI SA Real Estate -267.7

Distribuidora Internacional de Alimentación S.A. Retail -256.6

Aena SME, S.A. Transportation -251.5

Includes Active & Passive Investors -5,470.6

SOLD


Top Active & Passive Holders, Buyers & Sellers


Firm Country Style Turnover Equity Assets ($M) Value ($M) Change ($M) % Portfolio % Portfolio Chg

The Vanguard Group, Inc. P United States Index Low 2,949,094.9 25,055.7 1,233.7 0.8% 5.2%

Norges Bank Investment Management (Norway) SWF Norway Value Low 654,760.3 23,893.2 42.7 3.6% 0.2%

BlackRock Fund Advisors P United States Index Low 2,005,934.6 19,798.0 132.3 1.0% 0.7%

Capital World Investors (U.S.) United States Value Low 711,153.1 10,080.9 487.2 1.4% 5.1%

Capital Research Global Investors (U.S.) United States GARP Low 477,245.2 8,795.5 -218.2 1.8% -2.4%

Lyxor Asset Management SAS P France Index High 72,724.4 8,634.0 -1,751.0 11.9% -16.9%

BlackRock Advisors (U.K.), LTD P United Kingdom Index Low 149,592.1 8,625.8 24.0 5.8% 0.3%

Amundi Asset Management S.A. France Value Medium 91,182.5 8,338.0 1,329.8 9.1% 19.0%

Dimensional Fund Advisors, L.P. (U.S.) P United States Value Low 417,030.5 7,065.9 89.1 1.7% 1.3%

Fidelity Management & Research Company United States Growth Low 938,584.1 5,948.1 -442.7 0.6% -6.9%

BlackRock Asset Management (Deutschland) AG P Germany Index Low 55,066.7 5,258.0 216.3 9.5% 4.3%

BlackRock Investment Management (U.K.), LTD United Kingdom Growth Low 399,754.5 4,869.2 91.2 1.2% 1.9%

Qatar Investment Authority SWF Qatar Growth Low 55,165.2 4,840.1 0.0 8.8% 0.0%

OppenheimerFunds, Inc United States Growth Medium 167,751.8 4,514.0 6.9 2.7% 0.2%

Standard Life Investments, LTD (U.K.) United Kingdom Growth Medium 72,468.1 4,426.8 150.9 6.1% 3.5%

J.P. Morgan Asset Management (UK), LTD United Kingdom Growth Medium 122,613.7 4,422.2 450.5 3.6% 11.3%

APG Asset Management N.V. Netherlands Yield Low 174,776.3 4,086.2 0.0 2.3% 0.0%

Schroder Investment Management, LTD United Kingdom GARP Medium 128,767.0 3,996.9 9.2 3.1% 0.2%

Mediobanca S.p.A. Italy Specialty Low n/a 3,973.7 0.0 n/a 0.0%

INVESCO Asset Management, LTD (U.K.) United Kingdom Value Low 81,553.0 3,942.6 108.3 4.8% 2.8%

170,564.7 1,960.2


Amundi Asset Management S.A. France Value Medium 91,182.5 8,338.0 1,329.8 9.1% 19.0%

The Vanguard Group, Inc. P United States Index Low 2,949,094.9 25,055.7 1,233.7 0.8% 5.2%

Harris Associates, L.P. United States Value Low 115,954.8 2,154.9 706.2 1.9% 48.7%

Capital World Investors (U.S.) United States Value Low 711,153.1 10,080.9 487.2 1.4% 5.1%

J.P. Morgan Asset Management (UK), LTD United Kingdom Growth Medium 122,613.7 4,422.2 450.5 3.6% 11.3%

Lazard Asset Management, LLC (U.S.) United States Value Medium 99,604.8 1,616.3 381.7 1.6% 30.9%

Brandes Investment Partners, L.P. United States Deep Value Low 17,141.7 1,014.9 218.2 5.9% 27.4%

BlackRock Asset Management (Deutschland) AG P Germany Index Low 55,066.7 5,258.0 216.3 9.5% 4.3%

Danske Capital (Denmark) Denmark Growth Medium 25,136.8 936.0 215.4 3.7% 29.9%

BlackRock International, LTD United Kingdom Value Medium 20,549.9 917.4 208.2 4.5% 29.3%

Eurizon Capital SGR S.p.A. Italy Yield Medium 13,069.1 2,014.0 186.7 15.4% 10.2%

GLG Partners, L.P. HF United Kingdom Alternative Medium 17,206.7 582.2 172.7 3.4% 42.2%

Fidelity International Limited - FIL Investment Services (U.K.), LTD United Kingdom Growth Medium 107,508.1 3,737.6 169.7 3.5% 4.8%

T. Rowe Price International, LTD United Kingdom Growth Medium 37,091.6 1,854.5 164.4 5.0% 9.7%

Standard Life Investments, LTD (U.K.) United Kingdom Growth Medium 72,468.1 4,426.8 150.9 6.1% 3.5%

Allianz Global Investors GmbH Germany Growth Low 85,177.4 3,167.0 139.6 3.7% 4.6%

Arrowstreet Capital, L.P. P United States Deep Value Very High 52,946.7 804.5 133.3 1.5% 19.9%

BlackRock Fund Advisors P United States Index Low 2,005,934.6 19,798.0 132.3 1.0% 0.7%

Caixabank Asset Management, S.G.I.I.C., S.A. Spain Growth High 14,993.6 2,112.3 129.5 14.1% 6.5%

AQR Capital Management, LLC HF P United States Alternative Medium 109,441.4 1,020.7 126.6 0.9% 14.2%

99,312.1 6,952.9


Lyxor Asset Management SAS P France Index High 72,724.4 8,634.0 -1,751.0 11.9% -16.9%

Deutsche Asset Management Investment GmbH Germany Value Low 121,888.4 1,879.6 -1,630.7 1.5% -46.5%

T. Rowe Price Associates, Inc. United States Growth Low 674,764.8 3,007.2 -738.5 0.4% -19.7%

Fidelity Management & Research Company United States Growth Low 938,584.1 5,948.1 -442.7 0.6% -6.9%

Lazard Asset Management Pacific Company Australia GARP Low 8,048.2 2,376.1 -428.1 29.5% -15.3%

Jennison Associates, LLC United States Growth Medium 105,207.3 482.6 -286.7 0.5% -37.3%

Anima SGR S.p.A. Italy Value High 15,450.3 2,216.1 -281.1 14.3% -11.3%

Franklin Mutual Advisers, LLC United States Value Low 54,120.5 771.2 -232.8 1.4% -23.2%

Capital Research Global Investors (U.S.) United States GARP Low 477,245.2 8,795.5 -218.2 1.8% -2.4%

BNY Mellon Asset Management North America Corporation P United States Index Low 199,676.2 2,849.2 -201.0 1.4% -6.6%

Nordea Investment Management (Denmark) Denmark Value Medium 75,756.9 878.6 -171.4 1.2% -16.3%

Henderson Global Investors, LTD (U.K.) United Kingdom Growth Medium 58,354.9 3,076.9 -166.8 5.3% -5.1%

Fidelidade Companhia de Seguros, S.A. Portugal GARP Low 1,634.3 277.3 -149.1 17.0% -35.0%

State Street Global Advisors, LTD P United Kingdom Index Low 107,075.1 2,857.9 -147.9 2.7% -4.9%

Deutsche Asset Management (UK), LTD P United Kingdom Index Very High 20,649.1 2,043.6 -146.1 9.9% -6.7%

Lansdowne Partners (UK) LLP HF United Kingdom Alternative Medium 15,447.8 406.7 -145.2 2.6% -26.3%

TIAA-CREF Investment Management, LLC United States Growth Low 322,447.2 3,317.2 -145.0 1.0% -4.2%

Thornburg Investment Management, Inc. United States GARP Medium 30,371.5 1,943.9 -139.5 6.4% -6.7%

Columbia Wanger Asset Management, LLC United States GARP Medium 12,319.4 180.0 -122.8 1.5% -40.6%

Fidelity International Limited - FIL Investments International (Italy) Italy GARP High 1,225.5 818.6 -121.2 66.8% -12.9%

Includes Investors with EUM greater than $100M. 52,760.2 -7,665.7

SWF - Sovereign Wealth Fund; HF - Hedge Fund/Alternative; P - Passive Investor

Fund Style

Equity Assets

($M) Value ($M) Change ($M) # Stocks

The Government Pension Fund - Global Norges Bank Investment Management (Norway) Value 541,762.1 17,768.6 1,203.5 259

American Funds EuroPacific Growth Fund Capital World Investors (U.S.) Growth 137,506.9 6,389.7 176.8 16

Stichting Pensioenfonds ABP (Global Equity Portfolio) APG Asset Management N.V. Yield 174,065.7 3,891.1 423.5 94

American Funds Capital World Growth and Income Fund Capital Research Global Investors (U.S.) Yield 86,227.6 3,309.6 -301.8 15

American Funds Capital Income Builder Fund Capital Research Global Investors (U.S.) Yield 73,660.2 3,173.0 -106.1 9

Dodge & Cox International Stock Fund Dodge & Cox Deep Value 66,004.7 2,404.7 -8.8 3

Standard Life Investments Global Absolute Return Strategies FundStandard Life Investments, LTD (U.K.) Growth 10,411.5 2,261.2 476.3 20

Lazard Global Listed Infrastructure Portfolio Lazard Asset Management Pacific Company Specialty 4,997.0 2,017.8 139.8 11

Oakmark International Fund Harris Associates, L.P. Value 40,908.3 1,620.2 536.3 1

Oppenheimer International Growth Fund OppenheimerFunds, Inc Growth 26,648.7 1,410.9 0.0 5

Active funds only 44,246.8 2,539.6

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