Staying active: how to regain
trust in active management
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 always 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.
But while the majority of investors recognise the benefits of active management, many remain unconvinced that these benefits are worth their current cost – even as market conditions become more complex.
Our research explores why investors are sceptical. It also does something practical: by identifying where investors need support today, we show how asset managers can restore trust and make the case for active management. Below you can explore key takeaways from the research or you can download the full report.
Whatever capabilities active managers bring to the table, the question remains: does active management represent value for money?
Looking more closely at attitudes toward fees, we found that 68% of survey respondents think their institution would prefer fee structures that adjust when performance fluctuates.
Nearly three-fifths would switch to managers who offer better aligned fee structures.
It is important to note, however, that fees are considerably less important than other factors in the investor-manager relationship. Asked to list their priorities when choosing managers, just 6% of survey respondents cite fees among the top three.
Source: Allianz Global Investors 2019 Institutional Investor Survey
These results suggest that investors do not confuse value with cost, and are willing to pay for service that brings them clear benefits. For active managers, then, one way to gain client trust is by ensuring that fees fairly and consistently reflect their contributions – including new fee models that align cost with performance.
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Study methodology
- Allianz Global Investors commissioned Oxford Economics to conduct telephone surveys of 490 institutional investors, including insurers, public and private pension plans, sovereign wealth funds, family offices, foundations, endowments and banks, in 13 markets worldwide.
- Oxford Economics selected respondents across markets and institution types that reflect our client base. Respondents represent total assets under management exceeding USD 15 trillion.
- Respondents may include Allianz Global Investors clients, but clients were not specifically targeted so any such overlap would be coincidental.
- The survey was fielded anonymously in November and December 2018. The 490 respondents were split as follows:
| Region | AuM | |||
|---|---|---|---|---|
| Europe | 56% | USD 100 billion – USD 500 billion | 17% | |
| Asia Pacific | 24% | USD 25 billion – USD 99.9 billion | 16% | |
| US | 14% | USD 10 billion – USD 24.9 billion | 10% | |
| Middle East | 6% | USD 5 billion – USD 9.9 billion | 8% | |
| USD 1 billion – USD 4.9 billion | 15% | |||
| USD 500 million – USD 999 million | 20% |
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| < USD 500 million | 14% | |||
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