|02 October, 2019

GCC funds see net inflows of $2.5bln in H1: Refinitiv report

Overall assets under management in the Arabian fund markets increased from $30.5bln to $32.4bln in 2019 year to date

Traders look at the screens at Bahrain Bourse in Manama, Bahrain, February 7, 2018. Image for illustrative purposes.

Traders look at the screens at Bahrain Bourse in Manama, Bahrain, February 7, 2018. Image for illustrative purposes.

REUTERS/Hamad I Mohammed

The fund industry in the Arabian markets including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE enjoyed overall estimated net inflows of $2.5 billion in the first half (H1) of 2019 according to Refinitiv, a top provider of financial markets data.

These inflows occurred in a volatile but positive market environment driven by discussions about a possible trade war between the US and China, a possible return of the euro crisis caused by developments in Italy and France, and a general economic slowdown with decreasing earnings at the company level. Nevertheless, since the equity markets showed a rebound over the course of H1 2019, one would expect to see net inflows into mutual funds, Refinitiv said in the report.

“The overall assets under management in the Arabian fund markets increased from $30.5 billion to $32.4 billion in 2019 year to date. This increase was driven by overall net sales (+$2.5 billion), while the performance of the underlying markets had a negative contribution (-$0.6 billion) to overall assets under management,” noted Detlef Glow, head of EMEA Research at Lipper, Refinitiv.

The assets under management in the Arabian fund markets are highly concentrated since the largest fund market, Saudi Arabia, accounts for $26.9 billion, or 82.85 per cent, of the overall assets under management. Meanwhile, Kuwait accounts for $3.2 billion, or 9.82 per cent, of the overall assets under management, and the UAE accounts for $1.7 billion, or 5.09 per cent, of the overall assets under management.

The other three countries—Qatar ($0.4 billion), Oman ($0.3 billion), and Bahrain ($0.1 billion)—account together for 2.23 per cent of the overall assets under management in the Arabian fund markets.

Money market funds ($20.2 billion) were the asset type with the highest assets under management at the end of June 2019, followed by equity funds ($9.2 billion), mixed-asset funds ($1.2 billion), bond funds ($1.0 billion), real estate funds ($0.7 billion), and commodity funds ($0.002 billion).

2019 has so far been a tough year, with split results for the fund markets and asset managers in the Arabian fund management industry. Nevertheless, the year can be considered as positive as mutual funds (+$2.5 billion) have enjoyed net inflows, said Refinitiv.

A more detailed view by asset type reveals that not all asset types enjoyed inflows in H1 2019. Money market funds (+$2.8 billion) was the best-selling asset type, followed by bond funds (+$0.4 billion). All other asset types faced net outflows—commodity funds (-$0.0001 billion), mixed-asset funds (-$0.03 billion), real estate funds (-$0.2 billion), and equity funds (-$0.5 billion).

Money Market SAR (+$2.6 billion) was the best-selling sector overall, followed by Bond Other (+$0.4 billion), Money Market USD (+$0.2 billion), Mixed Asset USD Flexible - Global (+$0.02 billion), and Money Market Other (+$0.01 billion).

At the other end of the spectrum, Equity Saudi Arabia (-$0.3 billion) suffered the highest estimated net outflows overall, bettered by Real Estate Other (-$0.2 billion), Equity Global (-$0.04 billion), Equity GCC (-$0.02 billion), and Equity Kuwait (-$0.02 billion). – TradeArabia News Service

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