(Bloomberg) -- DWS Group, the investment arm of Deutsche Bank AG, reported net inflows of €18.3 billion ($19.7 billion) in the third quarter and improved its cost guidance for the year, signaling a recovery in performance.
The inflows, which beat analyst estimates, came mainly into its lower-margin Xtrackers and active fixed-income funds amid volatile markets, the Frankurt-based asset manager said in a statement on Wednesday. That marks a reversal from the overall €18.7 billion outflows the firm saw in the previous quarter.
Shares rose as much as 2.4% in early trading in Frankfurt on Wednesday.
Active equity and multi-asset funds saw outflows of €1.6 billion and €1 billion, respectively. DWS said the fundraising market for its alternatives business continued to be challenging, with outflows in liquid real assets and real estate funds. Overall outflows hit €500 million, continuing a trend from previous quarters.
The firm has been looking to grow its alternatives business to attract more fees and fresh capital. DWS is also aiming to boost its access to clients in India and China and is considering “strategic partnerships” with asset managers in those markets, Chief Financial Officer Markus Kobler said in an interview.
DWS said its “location strategy,” which includes growing its hubs in India and the Philippines, helped it bring down pay and benefits costs. The money manager now expects its cost-to-income ratio for 2024 to come in at the lower end of its previously guided 62% to 64%.
Other highlights:
- Adjusted pretax profit up 5% from the second quarter to €262 million, beating analyst estimates in a Bloomberg survey
- Management fees and other recurring revenues rose 2% quarter-on-quarter to €626 million
- Assets under management of €963 billion, in line with estimates, up from €933 billion at the end of the second quarter
(Updates with share move in third paragraph, CFO comments in fifth.)
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