ESG products potentially increased risk and challenge diversification.
Increasing investor interest seen in value investing.
Post pandemic - greater flexibility shown for home working.
Increasing investor interest has been growing in income, multi manager and real asset products according to the Group of Boutique Asset Managers (GBAM).
At their recent ten-year anniversary meeting in Madrid, GBAM members agreed that against a background of failing economic growth and rising inflation, most participants noted increasing client interest in income, multi-manager, and real assets.
The Group reported that diversification remains key, and members with D2C relationships citied the need to access private markets, including real estate and infrastructure. One member, MAPFRE* Asset Management, reported enjoying particular success with renewable energy projects with predictable returns over the longer term.
The members also agreed that the demand for sustainable products, particularly Article 8 and 9 under SFDR, came predominantly from institutional and public sector investors rather than from consumers. But they also raised concerns that the nature of some article 8/9 products being adopted as core investment products potentially increased investor risk, and challenged diversification - a feature which could prove to be negative for both clients, for the industry, and so for the cause of ESG. Investors needed to ensure they fully understood the consequences of moving up the ESG spectrum.
The meeting also reported that there was an increasing investor interest in Value but that had yet to translate into significant inflows. Some suspicion was raised that the rotation to Value was playing out in the ETF and passive market – a point which was felt to be ‘illogical’ given that volatility that should favour investment with active managers.
In the post pandemic world, the balance between working from home and office presence, had led the boutiques to adopt greater flexibility overall, with greater adoption of a core + flexible approach, with certain days requiring office attendance, including key meetings.
NOTES TO EDITORS:
The Group of Boutique Asset Managers (GBAM) is a global network of like-minded, senior executives of independent management firms who have come together to share knowledge and understanding, improve their presence in international markets, and to promote the value of boutique asset management to the wider market. GBAM is a private company limited by guarantee.
The principal activities of the GBAM are:
To foster cooperation among member firms
To identify best practice and shared experience in all aspects of asset management (research portfolio management, risk control, marketing etc.)
To improve understanding of operating in international markets
To support members by highlighting their expertise in their chosen fields
By providing a representative voice in the media
*MAPFRE AM is part of the Mapfre Group - the largest Spanish Insurance Group with a presence over 40 countries.
Sam Shelton, Senior Communications Manager
Tel: +44 7540 336998
FOR FURTHER INFORMATION CONTACT:
John Morgan, Company Secretary,
Group of Boutique Asset Managers Ltd
Tel: +44 7769 262272