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Natixis Investment Managers affiliate Ossiam has been hit by “significant” outflows from its exchange traded funds over recent months.
Ossiam ETFs posted consecutive monthly net outflows totalling €1.4bn over the past six months, amounting to more than 19 per cent of its ETF assets, Morningstar data shows.
The company, which manages Natixis IM’s European ETF range, as well as some mutual funds, has seen its ETF assets under management drop from €7.5bn to €6.7bn over this period.
The outflows come despite Europe’s ETF industry as a whole attracting €67.4bn of inflows over the past five months to the end of April.
This article was previously published by Ignites Europe, a title owned by the FT Group.
An Ossiam spokesperson said the trend among its clients was “a transition of some of their [environmental, social and governance] investments to more passive approaches”.
“At the firm level, our AUM has been largely stable since the start of the year, with net inflows in bespoke solutions and some outflows in ETFs,” the spokesperson added.
Natixis IM as a whole has had €1.3bn of net inflows into its European long-term funds, including Ossiam, as well as inflows of €4.1bn into money market products, Morningstar data for the past five months shows.
Ossiam’s “significant outflows” come despite a “steady rise” in assets over the past 10 years at the company, according to Monika Calay, director of UK manager research at Morningstar.
“This year’s consistent outflows suggest investors are rethinking their commitment to Ossiam, questioning whether the costs justify the returns,” she says.
Morningstar “takes issue” with Ossiam’s annual fees, which are “steep for their passive range” at an average of more than 40 basis points, Calay added.
Meanwhile the firm’s 36 per cent fund liquidation rate across its products was “substantial”, she said.
Ossiam had recently closed some niche funds, which reflected the challenges of sustaining interest in specialised products, Calay said.
“The future remains uncertain for many of Ossiam’s offerings,” she said, noting that 11 of its funds have assets below €100mn.
Many funds in the Ossiam range were smart beta, or strategic beta, strategies and the market share of such funds had declined in recent years, currently standing at 5.6 per cent, Calay noted.
“Investor behaviour has largely been influenced
