Geneva Forum – Swiss stave off gloom as fund inflows grow
On a clear, crisp winter’s day in Geneva, with the tills of the Christmas markets jingling, it is hard not to feel a degree of optimism. Switzerland is once again perceived as a financial safe haven for the region, and is weathering market volatility well. The storms gathering over the Eurozone may well cast shadows over the cantons, but local institutions are successfully navigating the turbulence.
Graciously, and diplomatically, Swiss asset managers do not want to be seen to be too pleased. In these times, who can complain of a strengthening currency and swelling fund flows? Besides, hazards remain, with Swiss exporters taking the strain of the rocketing franc, the growing challenge of co-ordinated monetary policy, and the effect of waves of financial regulation.
Fund buyers at InvestmentEurope’s Geneva Forum were intensely interested in trends emerging in neighbouring European markets. As Ed Moisson, head of UKI and Cross Border Research at Lipper, noted, cross border fund management groups are increasingly looking to sell into Switzerland. “Despite the economic environment, there is money waiting to move to long term investment. You can expect more fund managers to come knocking on your door.”
According to Lipper data, Switzerland’s strong bond-investing culture is opening up to equities, and like the UK market, there is also renewed interest in Absolute Return funds, even though many of these had “taken a hammering” this year. Swiss domestic fund sales are also growing rapidly.
Lipper tracks some 35,000 European funds, of which 9,000 are truly cross border, Moisson said. Overall, cross border activity has plunged since 2010 but it is still in positive territory, against domestic fund flows, which overall are not. The shift to cross border investing in Europe is part of a 10-year trend that has seen domestic flows ease from 80% of total fund flows to just under 60%.