Summary of Key Points from the Conference Call Industry Overview - The report focuses on the equity fund flows in the financial markets, particularly in the context of the week ending September 24, 2025, highlighting trends in both developed and emerging markets. Core Insights 1. **Equity Fund Inflows**: - There was a total inflow of **US$19.6 billion** into equity funds during the week, indicating a positive trend in equity investments [1] - Inflows into bond funds were higher at **US$24.7 billion**, suggesting a continued preference for fixed income securities alongside equities [1] 2. **Regional Fund Flows**: - **US Funds**: Experienced an inflow of **US$6.6 billion** [1] - **Global Funds**: Saw an inflow of **US$2.9 billion** [1] - **European Funds**: Resumed inflows with **US$2.1 billion** [1] - **Gold Funds**: Continued to attract significant investment with inflows of **US$5.0 billion** [1] 3. **Emerging Market (EM) Funds**: - EM funds recorded an inflow of **US$6.7 billion**, with **China ETFs** leading the way at **US$4.9 billion** [2] - **GEM Funds** also saw inflows of **US$2.3 billion** [2] - **Taiwan ETFs** faced redemptions amounting to **US$1.0 billion** for the second consecutive week [2] 4. **Local Market Dynamics**: - Taiwan and India experienced net foreign outflows of approximately **US$0.4 billion** each, while Korea saw an inflow of **US$0.3 billion** [3] - Hong Kong attracted **US$5.0 billion** from Southbound investors, indicating strong interest in the region [3] Additional Insights - The breadth of equity inflows is improving, suggesting a potential recovery in investor sentiment towards equities [1] - The report highlights the importance of monitoring fund flows as a key indicator of market trends and investor behavior [6] - The data indicates a shift in investment strategies, with a notable interest in ESG (Environmental, Social, and Governance) funds, although specific figures were not detailed in the provided content [123] Conclusion - The overall trend in equity fund flows suggests a cautious optimism in the market, with significant inflows into both equity and bond funds, particularly in the US and emerging markets. The dynamics in local markets, especially in Asia, reflect varied investor sentiment, with some regions experiencing outflows while others see substantial inflows.

Core Viewpoint - The issuance of equity funds has continued to be robust since August, with a notable increase in the number of new funds launched compared to July, indicating a growing investor confidence in public funds and the equity market [1] Group 1: Fund Issuance Data - As of August 25, a total of 157 new funds have been launched in August, representing a 5.37% increase from 149 funds in July, marking a record high for monthly fund issuance in 2023 [1] - Among the new funds, 125 are equity funds, accounting for 79.62% of the total new fund launches [1] Group 2: Market Sentiment and Institutional Response - The continuous recovery of equity fund net values has significantly enhanced investor recognition of public funds, leading to an increased willingness to invest in the capital market through funds [1] - Fund management institutions are actively seizing market opportunities by increasing the supply of equity products, further driving the growth in the number of public fund issuances [1]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Emerging Markets (EM) and specifically highlights the Foreign Institutional Investor (FII) flows in Asia, particularly Taiwan and Korea, as well as the performance of mutual funds in the region. Core Insights and Arguments - **FII Outflows**: EM Asia ex-China markets experienced significant FII selling amounting to **US$4.8 billion** week-over-week, primarily driven by Taiwan with **US$4.1 billion** and Korea with **US$0.8 billion** in outflows [1][35][40]. - **FII Inflows**: Conversely, India and Indonesia recorded minor FII inflows of **US$0.1 billion** each [1][35]. - **Global Equity Fund Flows**: Global equity funds saw inflows of **US$3 billion** week-over-week, contrasting with **US$26 billion** inflows from the previous week. Developed Markets (DM) experienced outflows of **US$2.5 billion** [5]. - **Mutual Fund Performance**: A sample of the largest **350 EM and Asian mutual funds** achieved year-to-date (YTD) returns of **17-18%**, with **65-70%** of these funds outperforming their benchmarks in August [6][10]. - **Mutual Fund Positioning**: EM funds are overweight (OW) in Indonesia and Thailand, while underweight (UW) in Taiwan. Over the past month, exposure to India and China has increased, while Taiwan's exposure has been reduced [12][14]. - **Hedge Fund Activity**: Hedge funds net bought Chinese equities at the fastest pace in **7 weeks**, indicating a shift in sentiment towards Chinese markets [6][14]. Additional Important Insights - **Southbound Flows**: Southbound flows into Hong Kong saw moderate inflows of **US$2.3 billion** this week, with a year-to-date total of **US$123 billion** [5]. - **Regional Performance**: The EM Asia region (excluding China) has seen a cumulative buying of **US$29 billion** after significant outflows of **US$98 billion** that began in July 2024 [33]. - **Non-Asia EMs**: Non-Asia emerging markets experienced selling of **US$290 million** week-over-week, led by South Africa with **US$270 million** in outflows [1][40]. - **China's Mutual Fund Allocation**: China's active allocation in mutual funds globally increased to **6.6%**, remaining underweight by **320 basis points** [17][19]. This summary encapsulates the key points from the conference call, providing insights into the current state of FII flows, mutual fund performance, and market positioning within the emerging markets landscape.

Group 1 - The core viewpoint is that despite declining deposit rates, the investment market is thriving, with the Shanghai Composite Index reaching a 10-year high [1] - The latest scale of public funds has surpassed 34 trillion yuan, indicating a significant growth in the fund industry [1] - In the first half of the year, the scale of open-end funds increased by 1.6 trillion yuan, with nearly 70% of this growth attributed to bond and money market funds [1] Group 2 - Equity funds also saw an increase, growing by 277.2 billion yuan, contributing to the overall positive trend in the investment market [1]

Core Insights - Federated Hermes reported Q2 2025 earnings with GAAP EPS of $1.16, exceeding analyst expectations of $1.03 and significantly up from $0.20 in the prior year [1][2] - Total revenue for the quarter was $424.8 million, slightly above the estimate of $422.81 million and an increase from $402.6 million year-over-year [1][2] - The firm achieved record-high assets under management (AUM) of $845.7 billion as of June 30, 2025, marking an 8% increase from $782.7 billion in the previous year [1][2][5] Financial Performance - Net income for Q2 2025 reached $91.0 million, a 333.3% increase from $21.0 million in Q2 2024 [2][8] - Operating expenses decreased by 15% year-over-year, primarily due to the absence of a non-cash impairment charge from the previous year [7] - Nonoperating income rose from $1.9 million to $13.7 million, contributing positively to overall financial performance [7] Business Overview - Federated Hermes is an investment management firm with a diverse range of products, including money market funds, equity funds, fixed-income products, and alternative strategies [3] - The firm generates revenue mainly through fees based on AUM, with a strong emphasis on money market products [3] Strategic Focus - The company is focused on growing AUM, complying with regulations, and leveraging its distribution network [4] - Key success factors include investment performance, regulatory discipline, and innovation in product offerings [4] Segment Performance - Equity AUM increased by 14% to $89.0 billion, driven by strong demand for MDT strategies, which saw AUM rise to $23.2 billion [5][6] - Fixed-income AUM grew 4% year-over-year to $98.7 billion, despite a slight sequential decline [6] - Money market assets reached $634.4 billion, an 8% increase year-over-year, while alternative and private market AUM rose 3% to $20.7 billion [6][11] Product Development and Market Trends - The firm is investing in new product development, including blockchain for money market fund tokenization and expanding ETFs and collective investment trusts [12] - MDT strategies and alternatives are showing strong momentum, with net sales of over $2.5 billion in the previous quarter [10] Capital Return - The regular quarterly dividend was set at $0.34 per share, with ongoing share buybacks authorized for up to 5 million additional shares [9][13] Outlook - Management anticipates continued demand for MDT strategies and alternatives, with a positive pipeline for new mandates in equity and direct lending products [14]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - US equity funds experienced an inflow of US$16.3 billion during the week of July 9, 2025, while bond funds saw an inflow of US$20.8 billion, indicating a mixed performance in US fund flows [1] - Global funds continued to attract strong inflows, totaling US$5.1 billion, while European funds had an inflow of US$1.4 billion, primarily into regional ETFs [1] - Emerging Market (EM) funds also saw significant inflows, with US$2.9 billion into EM funds, and US$3.0 billion into GEM funds, marking the fourth consecutive week of strong subscriptions [2] Summary by Sections US Fund Flows - US equity funds had an inflow of US$16.3 billion, while bond funds attracted US$20.8 billion during the week of July 9, 2025 [1] - Mixed flows were observed in US funds, with US$9.5 billion inflows into ETFs countered by US$6.1 billion in redemptions from non-ETFs [1] Global and European Fund Flows - Global funds saw inflows of US$5.1 billion, and European funds had an inflow of US$1.4 billion, mainly into regional ETFs [1] - The report highlights the continued strength of global fund inflows compared to US funds [1] Emerging Market Fund Flows - EM funds recorded an inflow of US$2.9 billion, with GEM funds attracting US$3.0 billion in subscriptions, indicating robust interest in emerging markets [2] - EMEA funds also experienced inflows of US$0.3 billion, while flows to Latin American funds slowed down, particularly in Chile, which saw US$156 million in net redemptions [2] Local Intelligence - Taiwan saw a net foreign inflow of US$1.2 billion, Korea had US$0.4 billion, and Japan experienced a significant foreign inflow of US$3.8 billion [3] - Southbound flows from China to Hong Kong remained strong at US$3.2 billion, reflecting ongoing investment interest in the region [3]