Your Dirt-Cheap ETF Threatens Asset Managers' Record Profits
Their fee revenue is getting pinched by low-cost exchange-traded funds, while in the U.S. new fund flows are meager
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Many of the world’s asset managers may need to work harder for their money.
Their profits revisited peak levels in 2014, and assets under management rose to a third consecutive record, at $74 trillion. But that growth came largely from rising global asset values. At the same time, a continued shift into lower-cost products such as exchange-traded funds (ETFs) pinched net revenue growth, and the amount of net new assets flowing into the firms barely budged, according to Boston Consulting Group’s global asset management report.