Investors pull billions out of asset managers

TWO of Britain’s biggest asset managers saw investors pull billions of pounds out of their funds last year in a sign that savers were shunning active stock-pickers.

Investors in M&G funds pulled out £1.3bn more than they put in, while Standard Life Aberdeen suffered from outflows of £58.4bn, which included the £41bn withdrawn when Lloyds ended a deal that saw Standard manage some of its assets.

As stock markets have been rising in the years following the financial crisis of 2008, investors have been ploughing more money into passive funds, which track an index and generally cost much less in fees.

But Standard Life’s chief executive, Keith Skeoch, was hopeful that this week’s carnage on the stock market would bring savers back around to the idea of active fund managers.

He said: ‘2020 viewed from today looks a bit difficult. It’s only active management that can really improve the ride on that rollercoaster.

‘If you’re in passive funds, you are going to be suffering those deep troughs followed by the rise up and down. There’s a huge opportunity for active managers opening up.’ M&G said that it was concentrating on growing areas such as investing in unlisted companies.

Skeoch urged the Government to promote a savings culture, so asset managers and pension funds have more cash to fund infrastructure projects and boost the economy.

He added: ‘I think it’s going to be fascinating to see what the Chancellor does [in today’s Budget].

‘He’s got a huge opportunity to put in place a big fiscal stimulus and promote what the UK needs most, and that’s spending on investment.’ Standard Life’s pre-tax profits were down 10pc over 2019 to £584m.

The investment firm, which manages £544.6bn on behalf of saver, maintained its 21.6p dividend. Its stock was 2.1pc or 5.1p to 244.5p.

Meanwhile M&G, reporting its first annual results since breaking away from its parent company, Prudential, saw profits fall 29pc to £1.15bn. Shares slid by 1.3pc, or 2.2p, to 170.2p.