Bringing you live news and features since 2006 

US managers rebalance product rationalisation efforts as advisers seek active and passive products 

RELATED TOPICS​

Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry and imperative to the product rationalisation process, according to the latest from Cerulli Associates in the US.

In particular, product rationalisation decisions related to active and passive products are necessary as the industry debates how much marketshare passive assets ultimately will command, the firm says. While the movement from active to passive management has been strong over the past decade, there are signs it is slowing as asset managers seek to implement active management in vehicles outside of the mutual fund—producing grey areas as to what falls under the umbrellas of active and passive management. 

Recent years have seen an increase in the blending of active and passive management to reduce overall strategy costs. Financial advisers believe active and passive work hand in hand, reducing overall fees with passive investments while implementing active for certain asset classes. According to the research, 81 per cent of advisers believe passive investments help to minimize portfolio costs, 82 per cent believe active managers are ideal for certain asset classes, and 74 per cent believe that active and passive investments complement each other. Understandably, focus on fees and returns net of fees are a significant portion of the competitive positioning for passive management. “The focus on fees illustrates the need to pay attention to external factors as part of the product rationalisation process,” says Matt Apkarian, associate director.  

Rationalisation teams at asset managers will benefit by understanding where—and how—to blend management styles. “With vast amounts of data available today, the ability to predict addressable markets, demand, asset-gathering potential, resource requirements, and other criteria associated with product rationalisation now can be more fact-based than ever before,” says Apkarian. “Listening to distribution resources and intermediary partners should be an integral part of the product rationalisation process, as they both have insights and an element of control over changing demand within the industry.”

Latest News

As the ETF industry reaches a milestone of USD12.71 trillion in global assets, Brown Brothers Harriman writes that its 2024..
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin closed last week at approximately USD66,300, marking a 7.8 per..
HSBC Asset Management’s (HSBC AM) ETF and Indexing business has passed USD100 billion in assets under management (AUM), reflecting its..
Amundi’s ETF Market Flows Analysis for April reveals that investors added EUR54.1 billion to global ETFs in April with equities..

Related Articles

Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Sean O' Hara
Pacer ETFs has announced the launch of three Cash Cows UCITS ETFs. The firm writes that this will give European...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by