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Chart of the day: Asset managers' index-hugging shares

Chart of the day: Asset managers' index-hugging shares
May 18, 2015
Chart of the day: Asset managers' index-hugging shares

This week’s sector focus considers the fortunes of London-listed asset management companies - excluding those housed under a life insurance parent - see the piece for a list of the managers included in the data. Today’s chart of the day demonstrates how much investing in the share prices of these managers is a play on the markets (source: S&P Capital IQ), here taken as the MSCI World Index.

In the pre-crisis equity boom these managers outperformed as the market swelled and positive sentiment prevailed - the growing assets under management and thus greater fees of these managers pushing them ever higher. But the rush out of growth strategies meant they fell even further than the index when times turned rough.

They suffered again from the equity market slowdown towards the end of 2011, and have worked their way back with the equity market recovery in recent years, though in a lower-return world have struggled, as a pack, to decisively move above the equity measure. On a 10-year view, the asset managers have offered very little against the index in terms of cumulative performance.