Staying active: how to regain
trust in active management

How do institutional investors view active asset management? How do they rate their managers’ ability to address their changing needs?

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.

At a minimum, investors expect their asset managers can help them navigate a market environment that grows more challenging by the day. Our survey, which coincided with steep equity market drops, shows most institutions believe the risk environment is at an inflection point.

Nearly nine out of 10 respondents (87%) think investors generally have grown complacent about risk management in the decade since the crisis, and 59% say loose central-bank policy has introduced a new level of risk.

Chart 1 - New risks
           Source: Allianz Global Investors 2019 Institutional Investor Survey

While overall they feel ill-equipped – with less than half saying they have access to the appropriate tools or solutions to deal with tail risk – they are positive about the role that active management can play. A clear majority (61%) think active management is the best option when the market is largely uncorrelated.

Investors face an environment that is changing not just cyclically but also structurally. Technology, demographics and other forces are driving fundamental shifts, where being on the side of the winners is more important than ever. Here again, investors see the value of active management: 71% think active managers are better able to manage the market risks caused by digital transformation.




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%

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