DWS's record inflows came from ETFs and cash funds; active funds took in almost nothing

DWS Group (Xetra: DWS) took in a record €30.9 billion of net new money in the third quarter, and almost all of it went to exchange-traded products and cash funds, according to its quarterly statement of October 28. Its active funds, taken together, had net inflows of €0.0 billion after rounding.

What happened

The Frankfurt-based asset manager said total net flows, which include cash products and advisory services, were €30.9 billion in the quarter, against €24.8 billion in the second quarter. For the first nine months of 2026 they reached €66.7 billion, which DWS said "exceeds the full-year total net flows recorded in every year since the IPO."

Two lines produced nearly all of the quarter's total. Passive asset management, which includes the Xtrackers exchange-traded funds and commodities products, took in a record €15.8 billion, up from €11.7 billion in the second quarter. Cash products added €13.9 billion, up from €12.9 billion. Together that is €29.7 billion, or 96.1% of the total (computed from the two figures and the €30.9 billion total).

Active management was close to flat. Inflows into systematic and quantitative strategies (€1.1 billion) and multi-asset funds (€0.2 billion) were offset by outflows from active equity funds (€1.0 billion) and active fixed income funds (€0.3 billion). Alternatives took in €0.8 billion, led by infrastructure products, while real estate funds and liquid real assets had outflows. Advisory services added €0.4 billion.

What it means for results

Total assets under management rose to a record €1,221 billion at the end of September, from €1,190 billion at the end of June and €1,085 billion at the end of 2025. DWS said the quarterly increase in long-term assets was mainly due to net inflows and currency effects, while market developments had a negative effect.

Revenue was €784 million, up 1% from the second quarter's €773 million. Profit before tax rose 6% to €325 million. Net income attributable to shareholders fell 3% to €230 million, which DWS attributed to a tax benefit recognized in the second quarter. The cost-income ratio, the share of revenue spent on costs, improved to 58.6% from 60.5%.

The table in the statement also shows a thinner fee margin. The management fee margin was 24.5 basis points on an annualized basis in the third quarter, compared with 24.8 in the second quarter, and 24.6 for the first nine months against 25.1 a year earlier. The statement does not say what drove the change, so the data do not show whether the mix of flows contributed. In the first nine months, management fees and other recurring revenues rose 11% from a year earlier, while average assets under management rose 13%.

DWS said it reaffirms the expectations in its 2025 annual report, "assuming a supportive market environment."

The background

Fund flows are a main driver of an asset manager's fees over the long term, and the pattern at DWS is not the only one in the industry. FinanceInTime reported on October 28 that ETFs drew BlackRock's and Invesco's flows while AB and Artisan had outflows from active equity funds. DWS adds a European manager to that picture, with the difference that a large part of its inflow was cash products.

DWS also said it plans to introduce Deutsche Asset Management as a new global brand for its institutional and international business from early November 2026. Product brands such as DWS, Xtrackers and RREEF, and existing fund names, will stay unchanged. In early October it signed binding agreements to buy Peakside Capital Advisors, a real estate manager with more than €1.7 billion in assets.

What to watch

The brand rollout starts in November 2026 and continues until March 2027, DWS said. The Peakside acquisition is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions.

Whether the fee margin keeps edging down as passive and cash products grow will show in the fourth-quarter figures. The statement shows the margin for both periods but does not break it down by product line.