Fund buyers looking for foreign equities – survey

Europe’s fund selectors expect to increase exposure to foreign equities the most in the next 12 months, according to a survey conducted by Incisive Research.

Commodities were another asset class likely to be supported, the poll found. It was conducted among 457 fund selectors across Austria, Benelux, France, Germany, Italy, Nordic, Spain and Switzerland in September 2011.

The aim of the survey was to identify the buying methods and preferences of the influential group of buyers targeted by most asset managers.

There were distinct differences among each of Europe’s national markets, but  also some common practices.

Overall European fund selectors agreed financial strength, stability and Investment process are most important when selecting managers. However, in Spain customer service and a good helpful approach is just as important.

More than half those polled would not invest in a fund without a minimum three year track record. But a majority also said they would overlook this requirement should the fund employ a fund manager with a proven track record.

A formal manager review is conducted every year by almost all fund selectors and an extraordinary review triggered by underperformance in comparison with peer group, or key man departures.

When it comes to selecting an asset manager, selectors prefer partners that are discreet, proactive, focused on investment performance, provide detailed rather than frequent reporting, a disciplined rather than flexible investment process and rigorous rather than uncomplicated business terms.

They strongly prefer managers to have their business focused on investment returns rather than Environmental, Social and Governance. They approve of a conservative rather than aggressive approach, and they prefer the fund to be a good fit in their portfolio, rather than simply a great fund.

They are looking for specialist and innovative managers.

 

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