Active is: Regaining trust in active management

How do institutional investors view active asset management?
How do they rate their managers’ ability to address their changing needs?

Those were among the questions we set out to explore,when we commissioned Oxford Economics to survey 490 institutional investors globally in November and December 2018.

The case for active asset management grows clearer towards the end of a market cycle. As volatility increases, gains are harder to come by, and the discomfort of riding a turbulent index can add to uncertainty about the future.

Given this backdrop, the majority of investors recognise the benefits of active management:

– 61% think active is the best option when the market is largely uncorrelated (Hong Kong: 68%)

– 71% think active managers are better able to manage the market risks caused by digital transformation (Hong Kong: 75%)

Still, many investors remain uncertain that these benefits are worth their current cost. However, by exploring what matters to investors, our research sets out a roadmap
for how managers can reassert the value of active management in meeting investors’ evolving needs.

While investment performance is critical, investors will prioritise those managers who i) understand their institution better and ii) can think beyond individual products and deliver tailored solutions.

This means that, for asset managers, being able to elevate the client experience in 5 main areas will be essential in future:

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