According to a Grassroots® survey from Allianz Global Investors, one of the world’s leading active investment managers, roughly 75% of the 550 IT decision-makers surveyed globally, are expecting their budgets to increase in 2020 compared to the previous year.
The primary goal for most investors? A positive investment outcome that aligns with their objectives and evolves as needed over time. Looking ahead, disruption will change the market environment and returns may be more difficult to find. Investors may have to work their money harder to achieve the goals they seek.
Here’s how active asset management can add value against that backdrop.
The evolution of active asset management, more closely aligned to clients’ needs, supports one overriding goal: the industry needs to earn the trust of its clients and stakeholders. Active managers are in a unique position to be relevant in ways that help to underscore that trust.
This includes working with clients to understand the solution they need. Beating an index benchmark may be only part of that solution. Clients will increasingly require multiple tools and strategies to achieve their required investment outcomes – and the overall solution may evolve over time.
How do you define active management?
There’s more to active asset management than beating an index benchmark. Working with clients to understand their liabilities and build an appropriate solution is key, says CEO Andreas Utermann. A benchmark may play a part, but more often a broader set of tools and strategies is involved.
External Video Content
This video is loaded through YouTube. Google is collecting information about your interaction with this video by using cookies and may use this for targeting their offers. Please accept cookies in order to show the video.
Active managers also need to be bold and innovative on pricing.
At Allianz Global Investors, we have introduced a new approach to performance fees – one that is consistent with our confidence in the value that we bring. Our new “outperformance fee” offerings charge a low base fee, comparable to a passive product. Clients pay an active performance fee only when we deliver attractive outperformance.
Furthermore, any period of underperformance “accrues” within the fund and clients only pay a performance fee once this underperformance has been made good. This may be an incentive to buy into funds and strategies that have seen a recent dip in performance but hold the potential for improved future returns – thereby discouraging a procyclical approach, where investors tend to favour funds that have performed well most recently.
Stay focused on the opportunity
Now and in the future, investors can benefit from partnerships with managers who share in our clients’ journeys for the long run, adding value in a cost-efficient way – including through innovative fee structures – and staying focused on where the next big opportunities are coming from.
Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.
The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.
This material has not been reviewed by any regulatory authorities. In mainland China, it is used only as supporting material to the offshore investment products offered by commercial banks under the Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations. This communication's sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of his document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors. This communication is strictly private and confidential and may not be reproduced. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional/professional investors only, and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP (Australian Registered Body Number 160 464 200) is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws.
This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors U.S. LLC, an investment adviser registered with the U.S. Securities and Exchange Commission; Allianz Global Investors Distributors LLC, distributor registered with FINRA, is affiliated with Allianz Global Investors U.S. LLC; Allianz Global Investors GmbH, an investment company in Germany, authorised by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG; Allianz Global Investors Asia Pacific Ltd, licensed by the Hong Kong Securities and Futures Commission; Allianz Global Investors Singapore Ltd, regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; Allianz Global Investors Japan Co, Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424, Member of Japan Investment Advisers Association and Investment Trust Association, Japan]; and Allianz Global Investors Taiwan Ltd, licensed by Financial Supervisory Commission in Taiwan.