Funds, double-digit rises in Europe thanks to the stock market

A double-digit rise. That's what the funds placed by Europe's leading investment houses offered their investors on average in the first nine months of a 2024 so far undoubtedly one to remember. Confirmation comes from the quarterly analysis conducted by Tosetti Value, one of Europe's leading multi-family offices, which reviews the returns and costs of all Ucits products distributed in at least one European country, classified as long-term funds, both active and passive (excluding ETFs) and managed by the top 250 companies in order of asset size.

The total return achieved by the Continent's top 30 management companies reached 10.2 per cent and is the second-highest since the data were collected, after that of 2019. Although unexpected at the start of the year - when economic forecasts were everywhere rather uncertain and there were fears of the consequences of the pitfalls linked to possible developments on the geopolitical chessboard - the result achieved by the funds was not, after all, very surprising. The gallop of the stock exchanges, summarised in all respects by the 18% rise in the global Msci World index in euro over the period, was in fact eventually joined by the positive performance of bonds, which after an uncertain start have pressed on the accelerator in recent months with the start of the expansive monetary policy moves adopted by the most important central banks.

This is another reason why at the top of the hypothetical ranking are companies whose clients have a more equity-oriented composition of their portfolios such as BlackRock (+12.8% since the beginning of 2024), Legal & General (+12.7%) and Fidelity (+12.1%), all closely following the Swedish outriders Sjunde (+16.8%) and Swedbank (+13.3%). They were also joined by Vanguard (+12.6%), the leader of index funds which, in a scenario characterised by generalised progress for listed companies, evidently once again ended up ahead of the more expensive actively managed products.

On the contrary, the clients of a company such as Pimco, which invests almost exclusively in fixed income, had to "settle" for progress of 5.5%, which is nevertheless considerable when one takes into account the breakdown of portfolios. It is precisely in this sense that the performance of the Italian companies should be considered: the average +7.3% recorded by Tosetti Value's analysis of the country's top ten management companies is in fact first and foremost the consequence of an investment landscape that at a national level sees the preponderance of bonds and an equity component that is still almost halved (26.9%) compared to the overall value recorded in Europe (51.6%).

The higher cost of our funds is undoubtedly a further reason for the difference in performance. On average, the recurring costs associated with the products placed with clients by Italian investment houses (ongoing charge) have remained at 1.49% and thus well above continental values, which have instead dropped by two cents to 0.85%: a difference that in the long run becomes a significant ballast. Since 2018, i.e. when Tosetti Value started collecting data, the big names in our country have in fact been able to return average cumulative returns to clients of just over 10%, when in Europe peaks of around 50% have been achieved in the same period (BlackRock and Vanguard again). A film already seen for the Italian savings industry.