Schroders defies ‘difficult’ market conditions as assets hit new high of £773bn

Schroders defies ‘difficult’ market conditions as fund manager’s assets hit new high of £773bn and investors pour more cash into alternative assets

  • Assets rose to £773.3bn in the six months to June despite market conditions
  • Shares rose 3% higher to 2,826p this morning
  • Its mutual funds lost £2.9billion in net outflows during the period, however 
  • St James’s Place reported a 7% fall in assets in the first half of the year 

Schroders’ assets under management have peaked at a new high as investors poured more cash into its funds in the first half of the year.

Assets rose to £773.4billion in the six months to 30 June, despite falls in equity and bond markets.

The asset manager recorded net inflows of £8.4billion during the period, with private assets and alternatives adding £4.8billion to the total.

Schroders has bucked the wider industry of falling assets in the current market 

Schroders’ solutions business added £6.3billion of new assets having benefited from the acquisition of River and Mercantile’s solutions arm, while the wealth management division added £3.8billion.

Its more traditional business areas felt the impact of the market headwinds, however. Its mutual funds lost £2.9billion in net outflows on negative market sentiment while the institutional division saw lost £7.6billion.

Schroders shares ticked 3.5 per cent higher to 2,826p this morning.  

Schroders added that, counter to industry trends, it had seen positive inflows into its equity mutual funds ‘which were largely due to our strong sustainability offering.’

Profit before tax fell compared with the same period in 2021, down 16 per cent to £313million.

The board has maintained its interim dividend at 37p per share.

Group chief executive Peter Harrison said: ‘We have built a diversified and resilient business that has weathered difficult market conditions, can fund growth and has put us in an excellent position to serve our clients.

‘The fact that we can report positive net new business in this period is testament to this. Our investment in sustainability has been a critical contributor to our success.’

Overall, Schroders has managed to buck the wider industry trend of investor outflows. 

St James’s Place, which also reported today, has seen a 7 per cent decline in assets under management to £142.3billion in the first half of the year.

Net inflows came in at £5.5billion, in line with the first half of 2021, and the fund manager expects net flows of around £11billion for the full year.

This would mark 2022 as the second highest ever year for flows for the wealth manager.