Mon, Oct. 17, 2:00 PM
- It's the kind of headline that makes one wonder if the bottom might already be in for traditional asset managers.
- The numbers won't surprise anyone who's been following along for any length of time: Over the three years ended Aug. 31, investors added nearly $1.3T to passive mutual funds and ETFs, while pulling more than $250M from active mutual funds.
- "Stock pickers, archetypes of 20th century Wall Street, are being pushed to the margins," write Anne Tergesen and Jason Zweig. "The pressure has gotten so great that passive has become the default,” says former Fidelity CIO Philip Bullen.
- And by the way, there's still plenty of room for the trend to continue - 66% of mutual and exchange-traded fund assets are still actively invested (down from 84% ten years ago).
- Active fund firms that don't “position themselves for the sea change” will be “relegated to the dustbin of history," said Cohen & Steers (NYSE:CNS) in shareholder letter earlier this year.
- Notable industry names: BLK, OZM, BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM, MN, EV, AMP
Fri, Oct. 14, 9:59 AM
- The struggles of traditional asset managers have been well-advertised in the age of ETFs, but the group has put in a decent bounce since early July.
- Deutsche is taking the opportunity to downgrade Ameriprise Financial (AMP +0.3%) and Invesco (IVZ -0.4%) to Hold from Buy.
- AMP is down 6.8% YTD, but up 10% since July 1. IVZ is lower by 10% YTD, but up 18% since July 1.
Wed, Oct. 12, 8:57 AM
- (NYSE:IVZ) Sept. 30 AUM of $820.2B lower 0.1% M/M due to by lower money market AUM and outflows in the PowerShares QQQs. FX negavtively impacted AUM by $0.3B.
- Equity AUM of $365.3B vs. $367.0B. Fixed-Income AUM of $207.0B vs. $205.0B.
- Active AUM of $676.9B vs. $677.9B. Passive AUM of $143.3B vs. $143.1B.
- Press Release
Thu, Oct. 6, 8:51 AM
- In one of the highest quarterly amounts ever, investors moved $92B into ETFs in Q3, according to UBS, bringing AUM for U.S.-listed ETFs to about $2.4T.
- For the year, $150B has flowed into ETFs, putting the vehicles on track for their third straight year of inflows north of $200B. The inflows stand in major contrast to either outright net exits or minimal inflows for mutual funds.
- Still, even after doubling AUM since 2011, ETFs account for just 17% of mutual fund assets.
- Interested parties: BLK, WETF, BEN, LM, GBL, CLMS, JNS, IVZ, TROW, AB, AMG, FII, WDR, APAM, EV
Wed, Sep. 21, 12:10 PM
- Smart Beta ETFs may be key for the next leg of industry growth, says asset manager analyst William Katz. Further, he expects to see a narrowing of winners, with low probability for newer entrants to pick up sizable market share gains. The key areas of opportunity, he says, are fixed-income, non-U.S., and institutional channels, with growth there coming from further declines in active management and single-stock trading.
- Back to being an early entrant: Katz says there's +0.81 correlation between the age of an ETF and AUM, and 71% of first-mover funds have the highest AUM for their category. For these reasons, current leaders like iShares (NYSE:BLK), Vanguard, State Street (NYSE:STT), PowerShares (NYSE:IVZ), and Schwab (NYSE:SCHW) should remain among the largest ETF sponsors.
Fri, Sep. 16, 8:31 AM
- Just 9.5% of actively-managed large-cap domestic equity funds beat the S&P 500 in the five year ended August 31 - the worst 5-year record since 1999, according to Morningstar. By comparison, in the five years ended 2010, nearly 50% topped the S&P.
- The lame results haven't gone unnoticed, with investors yanking $422B from roughly 3K mutual funds in the past five years, and putting that money and more into passive vehicles (ETFs).
- In the year ended June 30, 85% of large-cap stock funds, 88% of mid-cap funds, and 89% of small-cap funds failed to match their bogeys. "Pretty appalling," says S&P's Aye Soe. "Given the choppiness in the markets we would have expected the active managers to come out looking better.”
- Interested parties include BlackRock (NYSE:BLK), WisdomTree (NASDAQ:WETF), Franklin Resources (NYSE:BEN), Legg Mason (NYSE:LM), Gamco (NYSE:GBL), Janus (NYSE:JNS), Calamos (NASDAQ:CLMS), Invesco (NYSE:IVZ), T. Rowe Price (NASDAQ:TROW), AllianceBernstein (NYSE:AB), Affiliated Managers (NYSE:AMG), Federated Investors (NYSE:FII), Waddell & Reed (NYSE:WDR), Artisan Partners (NYSE:APAM)
Mon, Sep. 12, 4:25 PM
Thu, Aug. 25, 3:02 PM
- LPL Financial (LPLA +0.3%) in December will launch its no Transaction Fee Mutual Fund initiative, with the costs to be borne by the asset managers. To date, nine providers have signed up, including AllianceBernstein (AB +0.4%), BlackRock (BLK -0.3%), Invesco (IVZ -0.2%), and Legg Mason (LM -0.5%).
- While it's an incremental negative for the asset managers thanks to higher distribution costs eating into margins, says Katz, it could pay off in stronger inflows as investors will be paying less - thus making the mutual funds closer in cost to ETFs.
- It will be interesting to see how ETF sponsors - notably WisdomTree (NASDAQ:WETF) - react as their margins potentially get squeezed, says Katz.
Wed, Aug. 24, 1:02 PM
- Two big headwinds to worry about, according to Barclays Kenneth Hill: 1) Regulation is likely to force more money into passive products; 2) A market correction as the bull market has been partly masking poor inflows.
- Regulation: "Despite its somewhat innocuous initial assessment, the Department of Labor’s fiduciary standard will prove to be a sizable catalyst for change," says Hill. "We see it making it more likely that the industry will increasingly play it safe to avoid potential conflicts or unintended negative outcomes ... This likely means more low-priced passive in the place of high-priced active products."
- While M&A could be a boon, it will help only those firms with attributes worth acquiring; smaller active players could be left to sink. He favors names with scale and balance/diversified growth prospects across active, passive, and alternative channels like Invesco (NYSE:IVZ), BlackRock (NYSE:BLK), and even Legg Mason (NYSE:LM) at the expense of those that do not, like Franklin Resources (NYSE:BEN).
Tue, Aug. 9, 4:55 PM| Tue, Aug. 9, 4:55 PM | 3 Comments
Thu, Jul. 28, 7:44 AM
Thu, Jul. 28, 7:21 AM
- Q2 adjusted net income of $233M or $0.56 per share vs. $271.4M and $0.63 one year ago.
- Revenue of $856.6M fell 8.5% Y/Y, and adjusted operating income of $330.4M fell 15.3%.
- Ending AUM of $779.6B rose 1% for the quarter, and fell 3% Y/Y. Total net inflows of $2.7B during quarter, with active flat and long-term passive drawing in $4.5B. The QQQ saw outflows of $3.8B, and money markets inflows of $2B.
- $200M of stock bought back during quarter at average price of $27.14 each.
- CC at 9 ET
- Previously: Invesco beats by $0.02, beats on revenue (July 28)
- IVZ flat premarket
Thu, Jul. 28, 6:59 AM
Wed, Jul. 27, 5:30 PM
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Mon, Jul. 25, 4:31 AM
- The Brexit led to severe withdrawals at M&G, Schroders (OTCPK:SHNWY), Fidelity and Invesco (NYSE:IVZ) in June, as equity funds domiciled in Europe suffered their largest monthly redemptions since September 2011.
- Investors pulled at least €1B from the each of the four large investment groups, which are either based in the U.K. or have large hubs in the country.
Tue, Jul. 12, 4:31 PM
- IVZ June 30 total AUM of $779.6B dips from $791.1B a month earlier.
- Equity AUM of $348.8B vs. $360.1B. Fixed-income AUM of $196.3B vs. $194.5B.
- Active AUM of $646.1B down from $657.7B.
- Passive AUM of $133.5B vs. $133.4B.