Zürcher Kantonalbank in Switzerland tops sales list

Zürcher Kantonalbank (ZKB) in Switzerland has topped the list of most popular fund providers in the country in terms of net sales for September.

According to Swiss Fund Data, the firm has attracted CHF796m into its funds in the month of September – nearly twice as much as its competitor in second place, Swiss & Global Asset Management.

Over the past 12 months, ZKB’s funds have enjoyed unprecedented success, drawing nearly three times as much money as the next most popular provider, Lombard Odier.

In the last 12 months, ZKB has managed to grow its assets under management by CHF5.2bn, increasing its total AUM to CHF36.5bn.

In a statement, ZKB attributed the success of its funds to the focus on passive products and mandates, which it began building up back in 2010.

With the market volatility driving local investors away from risky investment options, passive products have been in particular demand in Switzerland.

Especially institutional investors, such as pension funds and insurance companies, often choose passive products over actively managed ones, banking on a more conservative investment strategy.

On top of this, the management fees for passive funds are lower than those charged for active mandates, which is a bonus in an environment where investors are concerned about costs more than ever.

It is worth noting that Swiss & Global, which came after ZKB in the ranking on net sales for the quarter, is a purely active asset manager.

Both providers, despite their recent popularity, hold a relatively small share of the Swiss market compared to the two market leaders – UBS and Credit Suisse, which make up 23.25% and 16% of the market, respectively.

ZKB has only 5.15% of the market, while Swiss & Global follows it with 4.68%.

Yet UBS has not even made the top 20 fund providers in terms of net sales over the past three months. Credit Suisse, although improved slightly in September, with net sales of just over CHF25m, has been steadily losing money over the past 12 months, down CHF2.3bn during this period.

This dynamic may point to a preference for smaller fund providers over the larger firms. Industry players also suggest recent negative headlines featuring some of the large Swiss banks have dampened public attitude to these providers.

Investor sentiment, however, is on an upward trend. Dr Matthäus Den Otter, managing director of the Swiss Funds Association, says although most investors are still reluctant to re-enter the equity market, there are signs of improving investor confidence.

Den Otter says: “An indicator of a move in a positive direction are the marked outflows from money market funds. In uncertain times, they are seen as a safe haven, but there seems to be less demand for this at the moment.”

The Swiss fund industry has continued to enjoy inflows in September, growing by CH7.4bn to nearly CHF710bn. The asset class that has seen the biggest inflows is equities, which also points to an improvement in risk appetites.

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