Asset Management Margins Turn Around
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Tuesday, July 12, 2011

Asset Management Margins Turn Around

Asset manager margins are recovering, mostly thanks to the market recovery, according to the newest report from Boston Consulting Group. Yesterday the Boston-based consulting firm unveiled its ninth annual study of the worldwide asset management business [see report. The report offers a worldwide picture (with some regional data) on asset management costs, revenues, assets, margins, flows and more.

Reuters' Ross Kerber reported on the study.

According to BCG's data, worldwide AUM for asset managers climbed eight percent last year to $56.4 trillion, thanks mostly to performance, not flows. That helped boost net revenue by almost 2.8 percent to 29.8 basis points, while costs dipped almost one percent to 19.9 basis points. That combined to give global asset management its first operating margin boost since 2007, climbing almost 6.5 percent to 33 percent.

BCG also expects ETFs and alternative products to dominate flows, and the report notes the continued rise of target date funds, which swallowed nearly 10 percent of mutual fund in-flows last year in the U.S.

The report also examines flow data, particularly concerning ETFs (where iShares, State Street Global Advisors and Vanguard still attract 75 of the net sales in the U.S.), describes long-term industry trends and offers tips on how to compete in a changing industry. The report's authors include: Brent Beardsley, Helene Donnadieu, Kai Kramer, Monish Kumar, Andy Maguire, Philippe Morel, Masahide Ohira, Gary Shub and Tjun Tang.

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