Actively managed funds dominate investor portfolios, highlights new survey

8th October 2015


Actively managed funds still make up the vast majority of advisers investment portfolios, according research from Schroders.

At a recent conference it found that in contrast passive investments remain a sideshow with 58% of those surveyed investing less than 10%.

This was echoed in a wider survey that the asset manager conducted amongst 2,000 intermediaries from across the globe.

The results showed that the most popular investment vehicles are equity funds with over half of the respondents, at 52%, preferring to recommend active funds over other instruments, such as direct stocks and exchange traded funds (ETFs).

Only 4% of the intermediaries surveyed prefer to recommend ETFs to their clients.

The analysis also revealed there is still a strong demand for income, with 56% of attendees stating income is their clients’ main investment goal – 29% asserted that their clients’ main investment goal is capital growth with a regular income and 27% pure income.

This trend was also reflected in the wider survey, which also found that 31% of clients’ main investment goal was capital growth and a regular income.

Investors appear to be looking to adjust their portfolios to respond to the recent market volatility. The survey of 2000 intermediaries showed that most respondents, at 60%, expect demand for investment advice to increase over the coming months with market volatility and new investment opportunities cited as the main reasons for this increase.

In addition, intermediaries found that there is a disconnect between investors’ risk appetite and their expected returns. Those surveyed said being too risk-averse and short-termism are the most common mistakes made by investors while 86% said that some of their clients had unrealistic return expectations.

Carlo Trabattoni, Schroders head of pan European intermediary and global Financial Institutions Group, said: “We were not surprised to see that income and active fund management are still two strong investment themes amongst intermediaries. However, one of the main questions that the survey raises is how to address the disconnect between end investors’ risk appetite and investment timeframe, and their expected returns.

“We agree that actively managed funds may help reach these goals. In the current environment of increased market volatility there needs to be well informed and careful consideration in portfolios asset and risk allocations. We advise investors to speak with financial advisers to determine the right asset and risk allocation for them.”

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