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Federated Investors pleased with FY'16 despite some equity outflows


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Federated Investors pleased with FY'16 despite some equity outflows

Despite suffering net equity outflows in the fourth quarter of 2016, Federated Investors Inc. more than doubled its full-year net equity sales in 2016.

Federated's domestic strategic dividend value fund returned 10.4% for the year, President and CEO Christopher Donahue said on an earnings conference call, comparable to the fund's five-year annual return of 10.8% and above its 10-year annual return of 5.2%.

Federated reported full-year net equity sales of $5.8 billion in 2016, its highest level on record. The fourth-quarter net equity outflows marked the second time Federated has experienced redemptions in the category in the last 13 quarters, Donahue said.

Federated reported fixed income net sales of $274 million in the fourth quarter of 2016, led by the company's ultrashort, institutional high-yield and floating-rate funds. The company has had fixed-income sales of $141 million as of Jan. 27, thanks to strong performances among all three funds, executives said.

Federated anticipates that the Federal Reserve will raise short-term interest rates at least twice in 2017, most likely occurring in March and September, Donahue said.

"As clients become more interested in what's going to happen with interest rates, that brings about our whole array of shorter-term type products," Donahue said.