Mood of the month

Fairly optimistic
The European fund buyer’s mood index kept slightly dropped also in April reaching 63.3 points (from 64.1 points in March). The downtrend was mainly driven by Austria, Switzerland and Sweden where respectively only 25%, 30% and 40% of the interviewed fund buyers declared to be optimistic over the next 12 months. On the other side the Spanish fund selectors confirmed their positive view with 84% optimistic responses about the next future.

Distributor commentary

For the week ending 27th April 2018
  • “When it comes to the most important drivers for the next few years, stability of product performance over time will be the key one. In addition, a well-defined product offering and transparency with regard to product strategies will play an increasingly decisive role as criteria in distributors' selection of their business partners. Furthermore, in the new, post-MiFID II business environment, the big fund houses appear to have an advantage over their smaller counterparts.”

    Drivers of change
    Italy, Independent financial advice / Intermediary services
  • “ESG will continue to develop, to the point that it will become important for all asset managers, even those who are not working on the subject yet. The industry will depend on the markets and the economic backdrop and will need to adapt to the changes in the economic environment. Overall, asset allocation will result in positive bets because the market has been very challenging recently for asset allocation funds. Their ability to generate performance will be increased.”

    Drivers of change
    France, Private client portfolios - Advisory
  • “We have seen a lot of asset managers moving to frontal based investing and we still see that because it is their answer to the low-cost ETF funds. At the other end we have got people going into more niche products like thematics but also sustainable funds or real quant funds, in order to get higher fees from them. Of course, everyone is currently looking at MIFID 2 to see how that affects their own market. So, everyone is looking for short-duration funds, especially cash-negative yielding with daily liquidity and cash-like volatility, but I can ultimately seeing them failing in either liquidity of volatility.”

    Innovative behaviour in fund industry
    Netherlands, Private client portfolios - Discretionary
  • “I expect the trend towards digitisation in the fund industry to intensify, which will lead to a reduction in personal contacts. We financial advisors have to put more effort into best-advice practice, research and the entire customer communication. This leaves us with the question which customer group will still be able to pay for an active fund management and fee-based advisors. Thus, the so-called small and medium-sized savers are increasingly excluded from personal advice. The trend towards the use of passive investment products is intensifying.”

    Drivers of change
    Germany, Independent financial advice / Intermediary services
  • “The two big changes are going to be at the technological and pricing levels. Companies are going to have to follow market developments and adapt their prices in relation to new regulations and to competition from passive management, which is in the process of overtaking active management. People are no longer willing to pay as much for active management and its high margins because passive management performs quite well. In terms of technology, it is difficult to predict future innovations but at the moment we are hearing a lot of talk about blockchain (aside from cryptocurrencies such as the bitcoin) and robotics, and these are two elements which could have a big impact in the near future.”

    Drivers of change
    Luxembourg, Private client portfolios - Discretionary

Holding onto the future

19 April 2018
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By Fiona Maciver

Fund-industry professionals and investors alike are often guilty of looking for short-term gains instead of long-term investment returns. The tide, though, may be changing as the cost of acquiring customers increases, and fund managers need to work harder to retain business and adapt to changing investor tastes. In our annual review of fundholding periods, we look at where

Translate perception into business.

Fund Buyer Focus offers reporting and consulting services which provide third party retail fund suppliers with detailed information about how the major fund distributors perceive them and how this perception translates into business.

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