Assets held in passive investments will represent more than 50% of the US market in four to seven years’ time, with the growth rate in Asia expected to increase, according to a Moody’s report.
Active managers are under pressure like never before to either justify or cut their fees, but have passive funds been getting an easier ride than they deserve as a consequence?
Benchmarks are a vital part of the asset management sector. Funds are measured against them, bonuses worked out in relation to them and entire sectors of the industry predicated upon them. But, if recent trends are extrapolated outwards, the days of the benchmark in its current form should be numbered.
Around 60% of financial advisers in the UK have concerns that clients are unaware of the risks of passive investing which tracks a market-weighted index or portfolio, according to a new survey by Natixis Global Asset Management.
The active management industry will have to shrink substantially, Moody’s Investor Services argues in a new report on the growth of passive investments.
Over the trailing three years, more passive China equity funds than actively-managed ones had returns of 20% or more, according to FE data.
But Natixis GAM, which conducted the study, believes they may be over-estimating the passive products.
Among the ‘factions’ fighting for investors’ attention around the globe, passive investing has see extraordinary growth over recent years, says Graham Bentley, director of Marlborough International.
Tilney BestInvest subsidiary, Tilney for Intermediaries, has launched a range of five risk-rated, multi-asset funds.
Platform provider AJ Bell is set to launch its own range of funds after agreeing to acquire a small London-based investment management business for an undisclosed sum.
Passive funds are set to be increasingly used as core holdings for client portfolios in the Asia-Pacific region, according to a report by global analytics firm Cerulli.
In an effort to further capitalise on the growing demand for smart beta exposure, ETF provider WisdomTree has listed four dividend-weighted ETFs on the London Stock Exchange.
