1) Recession Fears on the Rise as Market Volatility Persists Allianz Life | 10/9/2019
Because… Few investors have a strong stomach for market volatility, although the term shows up frequently in the media. From the prolonged U.S.-China trade war to the IMF’s prediction of the weakest global growth since the 2008 financial crisis, from the Fed’s interest rate cuts to soaring oil prices as a result of oil tanker attacks, events at home and abroad can be nerve-wracking to both inexperienced and skilled investors. Asset managers at this time should make greater efforts to help investors conquer their fears. Since investors’ knee-jerk reactions to fears and concerns can bring destructive consequences to their asset-accumulating efforts, firms should advise them not to panic and lose focus on long-term goals. Fund firms should also explain how risk exposure is controlled at their firm so that investors can stay calm despite market circumstances.
2) Most Asset Managers See Interest in Their Brands Decline: Global 100 Report PR Newswire | 10/9/2019
Because… A strong corporate brand has become increasingly important in a competitive industry. Investors tend to entrust their money to reputable asset managers they are familiar with. As a result, well-known companies will attract more investor assets and have the upper hand in gaining market share. This is particularly true for new products that have not established any track record. Brand assessment is also critical for companies involved in mergers and acquisitions, as the post-merger brand will have a long-term impact on the business value.
3) Worldwide Assets Rise 9% for Largest Index Managers Pensions & Investments | 10/14/2019
Because… The migration to passive management is no longer news. It underscores the need for asset managers to develop strategies to better survive among the cut-throat competition. The price war in the ETF space, the rise of strategic beta strategies, the asset-gathering success of low-cost funds, the prevalent use of ETFs by robo-advisory platforms, and discount brokers’ move to commission-free trading for ETFs are all driving fund firms to re-evaluate the competitiveness of their actively managed products. In addition to enhancing fund performance, asset managers will have to be more aggressive in slashing expense ratios of active funds, combining funds with similar objectives to create economies of scale, and communicating a compelling value proposition to the investing public.