Investor assets decline due to investor jitters prompted by Trump's tariffs
The trade wars have taken a toll on London-based money managers, as they grapple with the repercussions of recent global trade turmoil. St. James's Place and Jupiter Fund Management are among the firms reporting a slide in their assets under management, highlighting the ongoing market instability.
In the midst of President Trump's trade tariffs, stock markets worldwide have suffered major losses, and various asset classes have experienced substantial volatility. Although there are signs that the Trump administration may be backing away from the most disruptive aspects of its trade policy, investor confidence remains battered by an uncertain outlook.
Wealth manager SJP shared that its first-quarter managed assets dipped by £1.4 billion due to volatility linked to tariffs, resulting in negative investment returns of £3.3 billion. CEO Mark FitzPatrick warned that macroeconomic uncertainty and market volatility would create a challenging environment for savers and investors. Despite this, he expressed confidence in SJP's ability to navigate the conditions and help clients achieve their long-term financial goals.
St. James's Place saw its shares decrease 0.6% to 902p amid early trading, despite a 5.6% rise since the start of the year. Meanwhile, Jupiter's Assets Under Management (AUM) dropped by £1 billion over the first quarter, standing at around £44.3 billion, with net outflows and negative market movements costing the company £500 million. Jupiter managed to secure net positive inflows from big institutional investors of £1 billion, but this was offset by net outflows from retail clients of £1.5 billion.
Uncertainty surrounding trade policies negatively affected client sentiment in the retail, wholesale, and investment trusts channel, according to Jupiter. However, since the end of the quarter, the group hasn't noticed any significant changes in client sentiment or flow activity. Jupiter's shares dropped 2.7% to 68.3p, marking a 20% loss since the beginning of the year.
These developments echo similar outcomes reported by rival Quilter and emerging markets specialist Ashmore, which saw significant net client outflows due to trade-related volatility and investor uncertainty. However, AJ Bell's performance figures indicate that retail investors might still be optimistic about the market, with the investment platform reporting a £7.5 billion increase in Assets Under Management (AUM) after securing net inflows of around £400 million.
Three-quarters of the trades on AJ Bell's platform consisted of buys, with net investment totaling £300 million, suggesting that retail investors may be willing to take a chance. This sentiment aligns with Calastone data, which revealed that volatile stock markets failed to deter investors in March, with UK buyers adding a net £1.38 billion to equity funds for the best month of the year for the asset class so far.
In conclusion, the US trade tariffs have ignited market instability, causing setbacks for London-listed money managers like St. James's Place and Jupiter Fund Management. Despite the challenges, companies like AJ Bell still see signs of retail investor optimism, demonstrating the complex and evolving picture of the global financial markets in the face of trade uncertainty.
- Investors are grappling with the effects of trade wars on stock markets, as the volatility linked to tariffs has led to major losses in various asset classes.
- Wealth manager SJP reported a dip of £1.4 billion in its first-quarter managed assets, resulting in £3.3 billion in negative investment returns due to trade-related volatility.
- Jupiter's Assets Under Management dropped by £1 billion over the first quarter, with net outflows and negative market movements costing the company £500 million.
- Despite the negative impact on client sentiment, Jupiter hasn't noticed any significant changes in sentiment or flow activity since the end of the quarter.
- Despite the market instability caused by trade uncertainties, retail investors, such as those on AJ Bell's platform, are still showing signs of optimism, with net investment totaling £300 million.
