February 2008

A thought leadership group within Watson Wyatt expects a dramatic rise in index management, Roger Urwin, global investment head, tells Nick Fitzpatrick

"A lot of factors have now been aligned to make socially responsible funds perform better" - Niklas Tell (Tell Media Group)

Recent market events may cause investors to be nervous about their emerging market investments (not that this should necessarily be the case: see our report, p28). Yet some fund houses are still expressing optimism for markets beyond those of established emerging economies: the so-called frontier markets.

Fund managers stand to lose approximately $12bn (e16bn) a year in potential management fees, according to TABB Group.

With nearly $1 trillion currently invested in the United States in index-based products such as exchange-traded funds (ETFs), a serious threat to active managers is posed, says TABB.

In a report called Performance Anxiety: A Buy-Side Study of Benchmarks and the Investment Process, research director Adam Sussman says: “The appetite for index-based funds is nearly insatiable, with index-based assets under management increasing by 2,610% since 1993....

Asset managers can expect their concerns about capacity constraints in high-alpha and active funds to increase in 2008. A recent poll of 100 pension fund managers in the UK showed that appetite for absolute return strategies will increase this year...

F&C Asset Management, the UK-listed asset manager with approximately £103 billion (€137bn) of assets under management, has combined most of its front and middle office IT systems across its European business with one provider.

2008 could see the first actively managed ETF, among other innovations. Does this signal a big year for the products? Nick Fitzpatrick reports

Selling higher revenue products and increasing geographical reach is important for many asset managers’ profitability. Nick Fitzpatrick asks if Europe’s Ucits III funds can help

The UK is a tough market to enter, but Angelique Ruzicka speaks to asset managers that have found their way into the retail and institutional worlds. She also finds out where investors are looking to allocate funds

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