It has not been a good year for Spain and the country’s fund managers and 2012 looks equally challenging with developments depending on factors outside the authorities’ control and on the new government’s ability to implement reforms and restore investor confidence.
The high volatility in the markets and the global uncertainty have encouraged strong risk aversion among traditionally conservative Spanish investors . Guaranteed funds are the most popular products and this is likely to remain the case in 2012.
“Investors don’t want to hear about risk. You can say now you should invest in equities because the price-earnings ratio is so low. This is nonsense for the large majority of investors [who] want to be as sure as possible about the income they will have in the future and, what is more important, to preserve their capital,” says Martínez-Aldama.
Fund managers will continue to face similar problems says Ana Rivero, product and market intelligence director at Santander Asset Management, Spain.
“The asset management industry in Europe and in Spain has been hit hard in 2011. Risk aversion has settled in the markets and has led to outflows from most of the range of funds, even monetary funds that have returned above 2% this year, but couldn’t compete with deposits and other credit securities in the mainstream pipeline along commercial banks. 2012 will still be focused on the European debt issue, with a clear lack of hurry from investors to regain exposure to equities or risk assets,” she says.
Global asset products have been successful where capital protection is an issue, she says. Inflows into those funds are likely to continue in 2012, with investors looking for a pre-determined risk level, a transparent performance and good information. “We will continue to promote fixed income guaranteed funds which offer excellent conditions for structured products,” she says.
Schroders’ Bergareche says managers need to adapt to investors’ needs and perceptions. Having a broad range of products to offer helps to channel market trends and to encourage clients to rotate their portfolios, but options are likely to remain limited.
“Our view is still focused on fixed income products, income solutions, and as things evolve we could see investors raising their currently underweight positions in equities, always bearing in mind that the Spanish investor has become more conservative and capital preservation is now key.”