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Equities to remain biggest component of AUM thru 2018

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Investable assets under management are due to grow to $100 trillion by 2018, according to new research. Cerulli Associates unveils this forecast in the “Global Markets 2014.”

Now in its 13th iteration, the annual report examines institutional and retail asset management worldwide. The survey indicates that the past two years “have been good” for financial service professionals engaged in asset management, as the industry has enjoyed top-line asset growth in both developed and emerging markets. Nonetheless, the report contains a cautionary note about the industry’s prospects near-term.

“The dark days of late 2008 and early 2009 may be well behind us, but there continues to be pressure on net revenues,” says Shiv Taneja, London-based managing director at Cerulli. “Our five-year prognosis to 2018 is optimistic, but navigating the next couple of years could be a lot trickier.”

“For all the bashing global emerging markets have taken over the past couple of years, Cerulli’s view is that it will be markets such as Southeast Asia and a handful of others that will top the leader board of mutual fund growth over the next five years,” adds Ken Yap, the Singapore-based director of quantitative research. “Yet, what is most pleasing is that our analysts continue to feel positive about the world’s largest marketplace, the United States, which…will continue to be the engine of global asset management growth.”

By year-end 2018, the report predicts, equities will account for 41.8 percent of assets under management worldwide. Bonds, money market funds, and balanced funds will make up smaller shares of global AUM: 26.4 percent, 9.7 percent and 8.1 percent, respectively.

“Equities have been, and will continue to remain, the largest asset class by some distance, even if their overall share has seen marginal declines over the past decade,” the report states. “What is far more debatable is whether the margins on equities will continue to be as substantial as they have been in the past.”


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