Mood of the month

The European fund buyer’s mood index plunged to 60 points in July (from 62 points in June) landing in the neutral zone after being well positioned in the positive area since last year. The downtrend was mainly driven by countries which actually were always characterized by positive view regarding to the local fund industry. Foremost Spain and Belgium/Lux where only 50% and 25% respectively of the interviewed fund buyers declared to be optimistic over the next 12 months.

Distributor commentary

For the week ending 14th September 2018
  • “Apart from consistency and stability of product performance, among the other key criteria that we take into account are the quality of the provider's product offering in asset-class-coverage terms, the provider's capacity for product innovation, and its 'story-telling' ability in relation to the products that we distribute for it. An additional key consideration for us, especially in the case of boutique-style providers, is the capacity to offer specialisation and generally to stand out from the crowd.”

    Criteria for fund provider selection
    Italy, Fund supermarket / Online fund platform
  • “Price pressure will be the main driver of change. I think there will be price wars between passive funds and active fund managers and active managers will have to become more active in their portfolios. Active funds which are currently little more than index and benchmark trackers will disappear because I don't think that, in the future, clients will be prepared to pay active managers unless the can distinguish themselves by significantly out-performing the indexes.”

    Drivers of change
    Netherlands, Private client portfolios - Advisory
  • “The introduction of Artificial Intelligence into the industry will certainly be a change driver, particularly in the passive sector, which is where it is best suited. This will of course have negative effects on the active management sector, hindering any potential for growth in that sector. If Active managers want to thrive they need to change their focus and concentrate more on asset classes where AI might not be best suited.”

    Drivers of changes
    United Kingdom, Private client portfolios - Discretionary
  • “Something innovative would be a target-maturity fund with the capacity to pay out a regular income without eating into the original capital invested. I'm talking about a product that envisages the return of the full original capital to the investor at the end of the investment term, but without the complicated protection mechanisms and 'formulae' that tend to be used in this sort of fund. In other words, a fund that is simply well managed, with a good standard of risk management.”

    Product innovation requirements
    Italy, Fund supermarket / Online fund platform
  • “I would like to have a greater availability of alternative and specialised products. Agriculture is one example of a sector that could be better covered: I'm looking for small-cap companies that operate in that sector, but though I'd like to invest in such a product, I have not been able to find one that's available in Spain. When the market is in a growth phase you need to find the most interesting sectors or corners of the market and, at times, the lack of fund coverage in those areas forces us to invest directly in the corresponding equity sectors.”

    Product innovation requirements
    Spain, Independent financial advice / Intermediary services
  • “I am not really seeing anything I would call innovative. Often providers claim they are being innovative but rarely can I see when and how they are doing any real innovation. Mainly what they are doing is chopping and changing, trying different mixes of assets in different proportions, or launching a sector product (for example: a new Robotics fund) and yes some of that can be innovative if done correctly. However, very often they claim they can create Alpha though this mixing and matching process, yet fail to deliver.”

    Innovative behaviour in fund industry
    United Kingdom, Private client portfolios - Discretionary

The shifting sands of distribution

11 July 2018
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By Fiona Maciver

Six months on from the implementation of Mifid 2 and Priips, Europe’s new distribution landscape is slowly evolving as business models adapt to the regulatory developments. Meanwhile, the blurring of the boundaries between asset managers and distributors continues, with both sides moving into new territories and adopting vertically integrated models, resulting in the emergence of the ‘distributor-manager.

▪ Changes

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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