L&G Investment Management has reported external net inflows dropped to £14.6bn in the first half of 2018, a decline from £21.7bn for the same period last year, as flows into the group's international arms waned.
Despite solid flows from retail clients in the UK, particularly into the fixed income range, the group said international flows were reported at £9.9bn, lower than the £17.9bn reported last year.
Within its retail business, net inflows of £1.4bn were recorded, slightly lower than £1.8bn in H1 2017, with the group seeing "strong demand" for multi-asset, real asset and index products.
Retail assets under management (AUM) increased to £25.1bn, a climb from £21.4bn reported at the end of June 2017, "as we continue to develop our product range and client-service proposition in the UK and broaden our distribution strategy in Europe following the acquisition of Canvas", the results said.
The group also highlighted net external inflows into global fixed income of £6.5bn, an increase on last year's £5.3bn, driven by "continued strong performance across our range of funds" and "robust demand for credit strategies from US, while UK clients increased their fixed income allocations as they de-risked their portfolios".
Turning to the international businesses, the lower net inflows of £9.9bn were largely driven by a reduction of flows in Europe (£500m compared to £6.6.bn last year) and net outflows in the Gulf where "sovereign wealth funds are rebalancing their portfolios".
However, LGIM said it continues to build its international footprint and "expect a strong second half, with flows planned for H1 now expected later in the year".
There were also shifts in the index business with external net outflows rising to £18.6bn, compared to £4.3bn last year, with "UK DB clients implementing de-risking strategies together with the expected loss of £6bn of assets from one local government pension scheme."
The results said: "Outflows from the UK index business were partially offset by net inflows from US, Asian and retail clients.
"Our overall position was driven by positive flows from our DC, retail, DB Solutions, and international businesses, offset by the structural shift from our UK DB index business and a single very large outflow of £6bn from a local authority scheme, as previously flagged. This demonstrates the benefits of continued diversification."
LGIM's operating profit was reported at £203m, a 5% increase on the same period last year. Meanwhile, profit before tax was £199m, a rise from H1 2017's £190m.
Total revenues were £412m, up on the £394m reported last year, and management fee revenue also climbed slightly higher to £396m, compared to £382m last year.
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