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.
What criteria do investors use to select their asset managers? Aside from performance – which is critical – our survey respondents highlighted two criteria:
- First, they expect their managers to have a deep and holistic understanding of their institutions.
- Second, they look for managers who can offer solutions across different asset classes and strategies.
Percentage selecting as one of their top three priorities when choosing a manager. Source: Allianz Global Investors 2019 Institutional Investor Survey
These findings reflect a preference for managers who can tailor potential solutions to a client’s particular institution and desired outcomes. Having a command across asset classes is key – so too is being able to align with emerging areas of investor interest. According to our research, these include ESG and alternative assets.
Growing demand for these strategies plays to the strengths of active management. The real purpose of alternative and ESG allocations is to position portfolios according to specific client objectives and constraints, and a passive approach more often than not falls short.
Respondents see rapid growth in ESG investing… |
 |
Active managers seen as better equipped to deliver on client expectations and ESG goals:• 61% say active managers are better stewards of assets than passive managers • 68% say ESG investing exerts a positive influence on corporate behaviour and governance |
||
| • 71% expect ESG investing to grow dramatically more popular over the next three years | ||||
… but there’s room to clarify and standardise ESG terminology... |
||||
| • 60% say confusion about the different approaches to ESG investing and lack of standardised ratings / benchmarks limit allocations |
DOWNLOAD FULL REPORT
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% |
|||
| < USD 500 million | 14% | |||