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Asset managers move towards alternatives, multi-asset and ESG

multi_asset2The UK’s largest investment managers are shunning traditional asset classes in favour of alternatives, multi-asset and ESG when prioritising new product launches for 2020, according to a survey.

The survey found that 60% of asset managers surveyed cited alternatives as one of the top three priorities for product launches in 2020, followed by multi-asset (53%) and responsible investment products (40%).

The research, from the London-based Alpha FMC consultancy, found that multi asset demand remains high but institutional demand for alternatives is increasing.

Meanwhile, a growing popularity of multi-asset funds identified in Alpha’s 2018 report has continued.

Multi-asset funds accounted for 37% of net retail sales in the UK in the 12 months to February 2020 and 53% of net retail sales in February, according to the Investment Association, and this trend is expected to continue as investors seek diversification to help mitigate market volatility.

Joe Docker, executive director at Alpha FMC, said that 2020 will be a challenging year for asset management product teams.

“Given the market volatility as a result of the global pandemic, firms are likely to be reconsidering investment in product launches,” he said.

“However, many of the asset classes identified in our study as priority for 2020 will likely be in increased demand in a volatile market.”

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