The largest component of AuM growth for asset managers is market return. 2022 was by far the worst year in the last decade. Net inflows, which are more stable, were below trend but still positive in 2022.
Net inflows were however not equally distributed between managers. Many of the inflows went to passive managers and other large managers: 55% of managers sampled suffered net outflows for the year. BlackRock, Vanguard, Schwab, and Fidelity received 66% or 740b of the global industry's USD 1121 bn of inflows despite representing only 18% of global AuM. Schwab benefited from unseasonally large inflows into their money market funds.
2023 Forecasts
Lamb Quantitative Research (LQR) forecasts global net inflows to be +1.5% in 2023. This is below the mean of +2.5%. This prediction is based on a statistically significant negative correlation between net inflows and specific U.S. interest rates.
Investment return's contribution to AuM change will be +7% in 2023 based on a positive correlation coefficient of 0.46 with the MSCI ACWI equity index for the year to 30 June and LQR's forecast for a small (+1%) further increase in the MSCI ACWI up to year end.
Thus, we expect global AuM to be 8% higher in 2023.
Further details in "Asset Management Industry: Financials 2023", "Asset Management Industry: Fundamental Analysis 2023", and "LQR S&P 500 Forecasts"
Source: Lamb Quantitative Research (www.lambqr.com)
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