The Future of Asset Management: ETFs, Alts, and Private Markets Reshape the Retail Landscape
While interest in active ETFs will likely not grow anywhere quickly enough to make up for the losses from active mutual funds, active fund buyers’ shift from mutual funds to ETFs could well put a giant pot of assets—about $1 trillion over five years—in play.
ISS Market Intelligence Projects U.S. AUM to Hit $43.6 trillion by 2029 Amid Surge in Active Strategies and Liquid Alternatives
Our research underscores a pivotal transformation in the investment landscape. The convergence of increased market complexity and investor sophistication is driving the shift toward active strategies and liquid alternatives.
The Active ETF Race is On. What Are the Odds of Winning?
While active managers have been right to focus on ETFs, most have seen disappointing results for their efforts. Historically, the odds of reaching sufficient scale to generate meaningful revenues have been slim.
Mutual Fund Sales to See Relief from Drought Conditions, but Expect the Climate to Remain Weak
Active mutual fund managers will continue to face ongoing market share losses over the next five years, albeit at a much slower pace. ISS MI forecasts active mutual fund market share falling another seven percentage points, finishing the five-year period with 42% share.
ISS MI Five-Year Growth Outlook for Funds: Assets to Rise by $12 trillion, Bond Funds to Regain Share
Managers who can adapt to the challenges of the next half decade will have a crack at a much larger pie: ISS MI’s 2024-2028 outlook pegs 2028 AUM at $37.4 trillion.
ISS Market Intelligence Forecasts Long-term U.S. AUM to Reach $37.4 Trillion by End of 2028
The report projects that long-term assets under management (AUM) will climb approximately $12 trillion from 2024 to 2028, to an estimated $37.4 trillion by the end of 2028.
After a Dreary Decade, a Brightening Backdrop for Alts
We expect demand will remain strong in the years ahead. ISS MI’s 2023-2027 outlook projects nearly $240 billion in alternative fund flows over five years, a 12% annual organic growth rate. On the back of brisk sales, AUM is projected to rise 15% annually to almost $620 billion.
Active ETFs Emerge, Seeking to Soar
Active ETFs that come to market will continue to face similar obstacles as actively-managed products more broadly. Active ETF managers without top-quartile long-term results and bottom-quartile fees will struggle to attract assets, just as they have in the mutual fund arena.
For Active Managers, AUM a Weakening Indicator of Financial Success
Even controlling a minority of the assets, active managers will still generate most of the fund industry’s revenue growth over the next half decade. While no longer the industry’s growth engine, active management will still be its biggest money maker.