UK fund managers: market drops push scale-up into reverse
The negative correlation between stocks and bonds has vanished. Both asset classes are in freefall and UK fund managers are feeling the pinch. Updates from Schroders, Jupiter and St James’s Place have offered a mixed view of the sector. This is suffering its worst year to date since the financial crisis.
Falling markets are always bad for asset gatherers. They suffer a drop in income from fees levied as a percentage of portfolio values. Rising interest rates mean conditions this year are particularly challenging. Higher yields on bonds are luring investors away from income products cooked up in the low rate era.
The sector is trading at a forward earnings multiple of 8.7, its cheapest since 2008. But with earnings forecasts still near their recent peak, value is likely to remain elusive.
This story originally appeared on: Financial Times - Author:Tax Cognition
