Moody's downgrades outlook for 'underwhelming' global asset management industry

Passive growth accelerating

Moody's has downgraded its outlook for the global asset management industry to 'negative', as the level of flows moving into passive and low-fee products gathers pace.

The credit ratings agency said it had not reported a rating action, but had downgraded the industry's outlook from ‘stable' to ‘negative' as active management continues to "underwhelm". In addition, tighter regulation, such as MiFID II, could potentially constrain sales and further disrupt the industry. "Active management performance after fees continues to underwhelm," says Neal M. Epstein, Moody's vice president - senior credit officer. "Investors are remaining cost-conscious as skepticism of active management's value proposition increases." FCA Study: 'Tarring all active manager...