July 27 (Reuters) – British asset manager Schroders (SDR.L) reported a drop in first-half assets under management on Thursday, due to weaker investor sentiment amid market volatility.
UK investors are playing it safe pulling $842 million from equity funds in June in favour of money market and fixed-income funds, fund network Calastone said earlier this month.
“Like the rest of our peers we see this to be a challenging environment, markets are volatile,” Jupiter CEO Matthew Beesley told Reuters.
“We know that client confidence in markets is not high. With this uncertain environment ahead of us, we are vulnerable to our clients being a little more afraid.”
Despite the drop in assets at Schroders, UK fund managers are performing better this year than last, as fears of recession fade despite inflation and rising interest rates. Rivals Jupiter (JUP.L) and St James’s Place (SJP.L) saw assets rise.
Schroders assets under management fell to 726.1 billion pounds ($940 billion) in the six months to June 30, from 737.5 billion pounds at December-end. The company generated 5.7 billion pounds in net new business, excluding joint ventures and associates.
It saw operating profit of 341.4 million, up from 316.1 million in the previous six months, but down from 406.9 million in the six months to June last year.
Schroders CEO Peter Harrison said that wealth management performed well during the turbulent period in the UK bond market.
Schroders has “continued confidence” in the long-term outlook for the business and is focused on “effectively managing costs and maximising efficiency benefits from our platform”, Harrison said.
St James’s Place (SJP.L) reported a fall in half-yearly profit after tax but attracted 3.4 billion pounds of net inflows in what the company called a “challenging period” for UK investors.
Jupiter Fund Management’s (JUP.L) assets under management rose 2% to 51.4 billion pounds in the first half.
The fund manager saw “small” net inflows of 23 million pounds, helped by institutional client demand.
In addition to an ordinary dividend of 3.5 pence per share, Jupiter said it would pay a special dividend of 2.9 pence.
($1 = 0.7724 pounds)
Additional reporting by Eva Mathews in Bengaluru; Editing by Savio D’Souza, Sinead Cruise and Sharon Singleton
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