Financial advisers took £2.4bn ($2.91bn, €2.63) out of Schroders funds in the first six months of 2019.
The asset management giant said that, in the intermediary sector, negative investor sentiment towards the end of 2018 carried through to June 2019.
“In this ‘risk off’ environment, we saw net outflows from clients of £2.4bn, predominantly driven by a lack of demand for equity products. These redemptions were partially offset by net inflows into emerging market and European fixed income products.”
Overall, group profit before tax was down 14% to £319.3m, while assets under management was up 9% to £444.4bn (31 December 2018: £407.2bn).
On a brighter note, Schroders is due to receive £45bn in assets from Scottish Widows and Lloyds Banking Group during the second half of 2019.
These are assets that were previously part of Scottish Widows and a settlement was reached in July to divide £100bn of assets between the groups.
Wealth management
The wealth management arm reported an 21% decrease in profit before tax to £30.1m. (H1 2018: £37.9m).
Net income remained steady, generating £144m compared to £143.8m a year earlier.
Clients brought £900m of net new business (H1 2018: £1.2bn) to Schroders’ UK firms Cazenove Capital and Benchmark Capital.
Assets under management increased to £50.7bn, compared to 31 December 2018, when it stood at £43.7bn.
Business growth
Peter Harrison, group chief executive, said: “We have made further progress in wealth management and expanded our proposition in Asia Pacific with the acquisition of Thirdrock Group’s wealth management business.
“We look forward to the launch of Schroders Personal Wealth to the wider market, later this year.
“We have further strengthened our private assets business, including agreeing to acquire a majority stake in BlueOrchard Finance, pioneers in microfinance and impact investing.
“We have also continued to develop our geographic capabilities, such as our investment in China.”
