ISS Market Intelligence’s Latest Profitability Report Shows Resilient Margins Amid Declining Revenue Yields and Concentrated ETF Growth Across U.S. Public Managers
NEW YORK (June 25, 2026) – ISS Market Intelligence (ISS MI), part of the ISS STOXX GmbH group of companies and a leading provider of data, analytics, insights, media, and events solutions to the global financial services industry, has released its latest edition of the U.S. Asset Manager Profitability Report, which is now available to its MarketSage subscribers. The annual report analyzes the financial performance of 22 U.S. publicly-traded asset managers. This year’s release further highlights the push-and-pull that is currently redefining the industry: profitability remains solid, while the business model supporting it is under increasing strain.
The chart above shows operating margins again held steady in 2025. The median firm posted a 28.5% operating margin, which was almost unchanged from the year prior (29%) and aligned with the industry’s 10‑year average (28.6%). The report also highlights that at the same time, publicly operating U.S. asset managers are continuing to face shrinking client bases, weakening revenue yields, and eroding scale benefits. These pressures are reshaping the competitive landscape and narrowing the set of business models that public markets reward.
“On the surface, the industry looks quite profitable. However, when you look underneath, you see why managers aren’t celebrating,” said Christopher Davis, U.S. Head of Research and author of the report. “Most of these public firms are losing clients, and the growth that does exist is flowing to a handful of index-heavy players. Profitability has been held up by rising markets, not by business momentum, creating a highly competitive environment where paths to success are narrowing.”
While disciplined cost management and rising markets helped preserve margins in 2025, the underlying growth engine continues to sputter. Fifteen of the 22 public firms analyzed experienced global net outflows last year, extending a decade-long pattern in which most managers have struggled to generate organic growth.
ISS MI points out in the report that the problem is not a lack of demand, it’s where that demand is going. In the U.S. market, ETFs absorbed roughly $1.4 trillion in 2025, while mutual funds shed nearly $700 billion. Within ETFs, flows remain concentrated in index strategies, benefiting a small group of public firms, BlackRock most notably, alongside State Street, Invesco and Wisdom Tree. Active ETF success stories exist, and J.P. Morgan is one example. However, among most active managers, similar success stories have been few and far between.
Davis added: “Asset growth simply doesn’t deliver what it used to. A dollar of new assets generates fewer revenues and fewer efficiency gains than it did a decade ago. Firms have become more efficient, but they’re reinvesting those gains into technology and other strategically key areas just to stay competitive. In a finely tuned environment like this, the margin for error is small and firms that lack distribution savvy and a compelling value proposition are bound for middling profitability—or worse.”
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About the Asset Manager Profitability Report
ISS MI’s Asset Manager Profitability Report provides a clear view of the financial health and competitive position of U.S. asset managers. First published in 1998, the series analyzes detailed financial disclosures from 23 publicly traded firms and connects these results to long-term industry trends. It offers a unique perspective on how the universe of public managers is evolving.
By linking profitability outcomes to structural forces shaping the market, the series helps executives, analysts, and investors understand the pressures facing asset managers today and the strategic decisions required to stay competitive in a rapidly changing environment. The series also highlights how these pressures are reshaping the future of asset management and identifies the models that are best positioned to succeed as the industry evolves.
About ISS Market Intelligence
ISS Market Intelligence (MI) is a leading provider of data, insights, and market engagement solutions to the global financial services industry. ISS MI empowers asset and wealth management firms, insurance companies, distributors, service providers, and technology firms to assess their target markets, identify and analyze the best opportunities within those markets, and execute on comprehensive go-to-market initiatives to grow their business. Clients benefit from our increasingly connected global platform that leverages a combination of proprietary data, powerful analytics, timely and relevant insights, in-depth research, as well as an extensive suite of industry-leading media brands that deliver unmatched market connectivity through news and editorial content, events, training, ratings, and awards.
About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,800 professionals operating across 30 global locations in 20 countries. Its approximately 5,500 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.
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