Franklin Templeton was named the world’s best-selling retail fund manager for 2020 after investors withdrew nearly $ 50 billion from the U.S. group, marking the latest sign that it is struggling to turn around its fortunes.
The California-based asset manager has endured more than half a decade of major redemptions, repeatedly holding the crown of the lowest-selling investment manager.
Clients withdrew $ 48.3 billion net from Franklin Templeton mutual funds last year, according to figures from data provider Morningstar, in a list of least-selling managers dominated by active groups looking to beat the markets through individual stock picking.
The Franklin Templeton buyouts came despite the group’s efforts over the past few years to improve its position, including appointing Jennifer Johnson, a member of the founding family of the asset manager, as chief executive, and then announcing the acquisition of rival asset manager Legg Mason in February.
Morningstar data incorporates open-ended funds, including exchange-traded funds, but excludes money market products.
Franklin Templeton, who oversees nearly $ 1.5 billion in assets, said the investment performance of some of his larger strategies “has come under pressure, which has contributed to exits.”
“This type of underperformance is not abnormal in a dynamic market,” he added.
One of Franklin Templeton’s best-known portfolio managers, Michael Hasenstab, was among those hardest hit by buybacks after its performance suffered due to a disastrous bet that bond prices would fall.
Amin Rajan, chief executive of CreateResearch, an asset management consultancy, said Franklin Templeton “once enjoyed pole position in emerging markets and fixed income investments” but has struggled over the years. years that followed.
“Like his active peers, Franklin is now examining each business area to maintain its relevance in a rapidly changing investment landscape,” he said. “Its acquisition of Legg Mason is intended to be transformational. In the meantime, he remains on the watch list of many institutional investors. “
Franklin Templeton stated that the specialized investment managers acquired under the Legg Mason transaction “continue to operate on their own and their associated flows and performance will be fully reflected in our coming fiscal year.”
He added that he had seen “strong performance and strong momentum across several key asset classes, including fixed income, US equities and alternatives.”
The 2020 figures include data for Franklin Templeton and Legg Mason, after the acquisition closed in July.
Morningstar figures also show that Capital Group, a leading active manager, suffered a terrible year in 2020, with investors withdrawing $ 33 billion net from its branch of US funds. Overall, Capital Group recorded net outflows of nearly $ 27 billion last year. Dimensional, Invesco and T Rowe Price have each been hit with net buybacks by retail investors of at least $ 26 billion.
Tony Thomas, Associate Director of Equity Strategies at Morningstar, said: “2020 has not been great for active managers. Stores with primarily actively managed offers dominate the list of companies with the most releases. “
BlackRock, the world’s largest asset manager, tops the list of best-selling fund managers, amassing nearly $ 260 billion in net sales – more than double that of its closest rival, Vanguard.
While the worst-selling list was dominated by actively managed funds, some stockpickers have managed to attract large sums of money. JPMorgan Asset Management was the third best-selling manager in the world last year, with $ 67.6 billion in net inflows. Fidelity, Morgan Stanley, PGIM and Nomura also made it to the top 10.
Ark Financial, a small asset manager specializing in actively managed exchange traded funds, attracted more than $ 20 billion thanks to strong fund performance. Several of its ETFs ranked among the the most efficient actively managed equity funds in 2020.