PIR Monitor (September 2018)
Inflows resilient despite increased volatility
Net inflows in PIR funds amounted to € 3.34 bn in 1H18 with total stock reaching € 18.6 bn of AUM. Considering the deceleration in 2Q18 (€ 1.35 bn vs. € 1.99 bn in 1Q18) and the volatile performance of markets in 3Q, we have trimmed our 2018 net inflow estimate by -7% at € 6.5 bn.
Since PIR funds were launched, the absolute performance of Italian mid-small caps has reached 39%. 2018 earnings estimates are up by 8% and therefore PIR, but also the investors’ preference for Quality stocks (supported by strong earnings momentum), paved the way for a 31% re-rating of the Italian midsmall caps. We think PIRs are excellent and very effective instruments.
We believe that it could be interesting to develop additional investment tools specialising on SMEs, as small sized companies need specialised investors. These tools would undoubtedly offer the advantage of supporting domestic companies in their growth.
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