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Money Management

DWS assets grow 3% in quarter despite more outflows

DWS Group reported €687 billion ($800.2 billion) in assets under management as of June 30, up 3% for the quarter, despite net outflows.

The money manager recorded €4.9 billion in net outflows in the second quarter. A financial update Wednesday attributed the outflows to "market volatility, rooted in trade tensions and heightened uncertainty within the European Union, as well as the continued — while smaller — impact of the U.S. tax reform."

For the first quarter, net outflows totaled €7.7 billion.

Figures for the first quarter are pro forma for comparative reasons, following a number of changes for DWS including its move to become a stand-alone company, which also saw the firm change its name from Deutsche Asset Management. Comparative figures to the second quarter of 2017 were not available.

DWS said multiasset and strategic quantitative strategies within the firm's active money management business, as well as alternatives, "rebounded into positive net flows."

Fixed-income strategies recorded "outflows, mainly driven by a small number of institutional mandates," said the update. Figures were not available.

Revenues for the quarter were €576 million, up 3% vs. first quarter, while profit totaled €149 million, representing a 7% increase compared with the first quarter.

Positive market conditions added €6 billion to assets under management, while currency impacts added €13 billion for the quarter.

"During the second quarter, we made good progress toward delivering on our medium-term targets and in developing our sustainable, global and leading asset management business," CEO Nicolas Moreau said in a statement accompanying the update. "While the net outflows were disappointing, we made a lot of good progress, adding new partnerships in sustainable investing and the digital space, making strategic hires to complement our distribution network and improving our operational efficiency,"

The update also outlined DWS' outlook. The firm said regarding asset flows that "given factors, including the volatility of markets and investor sentiment and U.S. tax reform dynamics, we believe the ability for DWS Group to compensate for the outflows of the first half of 2018 will not be possible, and it will therefore be unlikely that we achieve the annual net flow target for this year." The manager has a 3% to 5% net flow target in the medium term.