f F S...why do u invest in fund mngrs if you dont even know he basics of flows/FUM?
FUM movt and flows lesson 101 (again) - this is an extract from PPT (the way IT SHOULD BE DONE)
YOU HAVE STARTING FUM (LAST PERIOD/MONTHS CLOSING BALANCE)
1. + OR - FLOWS
2. + OR - MKT MOVTS
3. + OR - FX IMPACTS
= CLOSING FUM AT NEXT PERIOD.
simple.MFG do NOT split it to smokescreen the results and make mugs believe any increase is solely fund performance.....well NO, its not.
When currency moves favourably, as it has this month, it CONCEALS bad performance by making the results appear better than they really are.
So, using MFGs balances:
1.
You LOST $0.4bn in client outflows (peeps getting the F out)
2. Mkt performance was crap - guestimate of ~$+0.3m on $35.8bn = 0.8% monthly return (hopeless - will cause more FUM to exit)
3. Fake, not real, FX translation gains (which mean nothing to the client in local currency, simply an accounting anomaly to convert into AUD for reporting purposes and may be realised if converted/redeemed) = +$0.6m for the month (could actually be higher - this is an approximation)
so $36.3bn closing FUM - $35.8bn opening = + $0.5bn made up of
-($0.4bn) in clients exiting the funds,
+$0.3m in positive mkt returns across all mandates,
+ $0.6m in fake, rubbish, swings and round about FX currency translation gains.
-0.4+0.3+0.6 (FX the largest contributor) = +0.5bn overall movement.FX (again) is your saving grace here.
that concludes funds flow and FUM lessons for dummies 101.
hope it helps.
(20min delay)