Most publicly traded money managers reported quarterly and annual increases in AUM as well as net inflows in the first quarter of the year — in stark contrast to a 2020 first quarter ravaged by the coronavirus pandemic.
Among 23 of the publicly traded managers tracked by Pensions & Investments, aggregate AUM grew 5.4% for the quarter and 33.7% for the year ended March 31 to $32.05 trillion.
"It's been a very different quarter from Q1 2020," said Nalini Kaladeen, London-based director in the EMEA non-bank fixed-income team at Fitch Ratings Inc.
"In that period last year we did see in particular the market effects really dominating the AUM picture — for quite a few of our managers we saw declines of around 12% just from the market effect alone."
At its height in terms of impact on financial markets, the COVID-19 pandemic caused an almost 23% drop in the S&P 500 index for the year-to-date March 23.
But the first quarter of 2021 has been "a lot more stable. ... The general picture we're seeing ... is a robust Q1 performance but with the overhang of the continued pandemic issues and slight frothiness of markets," Ms. Kaladeen said.
The S&P 500 index gained 6.2% in the first quarter of 2021.
At BlackRock Inc., for example — the largest money manager in the world with $9.01 trillion in assets as of March 31 — market increases alone added $164.7 billion in the first quarter. BlackRock, which saw AUM grow 3.8% over the quarter and 39.3% vs. March 31, 2020, also recorded the highest net inflows for the quarter among the 23 managers, at $172 billion.
The firm attributed the growth to its iShares exchange-traded funds business at $68.5 bil- lion in net inflows, cash management strategies, retail and institutional net inflows.
Passive was a continued success story for managers in the first quarter, sources said.
U.S. mutual funds and exchange-traded funds attracted record total inflows in the first quarter, at about $400 billion, according to Morningstar Inc. Within the wall of money moving into equities — with value strategies attracting a huge amount as part of a rotation out of growth — "all this money is basically going to passive strategies," said Adam Sabban, Chicago-based manager research analyst, equity strategies at Morningstar Research Services LLC. That means the "index fund titans have been taking in the most assets by far," he said.
In fact, while some of the value trade has translated into inflows for active managers, "it's still overwhelmingly passive overall. Even though U.S. equity funds took in a record amount, actively managed funds actually suffered outflows — passive offset that" in the month of March, Mr. Sabban added.