Clients of the Allianz Strategic Bond fund withdrew an average of £170mn per month in the quarter prior to manager Mike Riddell announcing his departure from the firm.
FT Adviser previously revealed Ridell, who had run the £1bn fund since 2015, was leaving Allianz to run a range of funds at Fidelity.
In the five years prior to his departure, the fund sharply underperformed, losing 3.8 per cent, while the average manager in the sector returned 8.7 per cent.
The data on outflows comes from Morningstar direct.
The kernel of the underperformance was that Riddell was primarily invested in longer-duration bonds which, since 2021, have largely underperformed as markets began to re-price fixed income assets in anticipation of rates rising.
Higher rates are negative for longer-dated bonds as the relative value of the income is worth less when compared with the higher yields on bonds coming to market which reflect the higher base rate.
Riddell is joining Fidelity to run a number of funds, all of which have smaller assets under management than the fund he is leaving behind at Allianz.
The Morningstar data showed the bulk of the outflows this year to date came in February when more than £316mn exited the fund.
In total, there have only been two months since the start of 2023 when the fund has had a net inflow.
From January 2023 to the end of March 2024, the fund shrank in size from £2.2bn to £984mn as a combination of outflows and performance issues took hold.
Data from FT Adviser’s sister publication Asset Allocator showed that interest in the fund among the largest wealth managers was also declining, with several exiting the fund over the past two years.
Following Riddell’s departure, the fund will now be managed by the broader fixed income team at Allianz.
Prior to his role at Allianz, Riddell worked as part of the fixed income team at M&G.
david.thorpe@ft.com
