Asset managers performed well in 2012 which may be surprising given the continued uncertainty plaguing the eurozone, the threat of the US fiscal cliff and a general lack of opportunities in mature markets. Even so, with a few exceptions, asset managers have outperformed broader indices by a country mile.
Part of this strength can be attributed to a greater level of resilience in financial markets. True, volatility continues to cause chaos to investment models from time to time, but while investors remain unhappy about the eurozone, the fiscal cliff and weak or zero growth, they are at least coming to terms with the situation. Some have been attracted towards more defensive lower-margin mandates, while others have continued to be attracted by the returns offered in emerging markets.
Looking ahead to get a feel for what will happen in the coming year that will have a bearing on investor sentiment is hardly an easy task given the unexpected developments in 2012. However, what remains clear is that a fiscal tightening in the US will act as a drag on economic growth, although there is always a possibility that sentiment elsewhere – even in Europe – will improve. Unsurprisingly, investors have sought the comfort of low-risk/low-return investments, and many institutional investors have gone one stage further by simply parking funds on deposit.
But risks remain, not least because the drive to place funds in bonds has led to suggestions that a speculative bubble has been created that will soon burst. The jury remains out on this one, but with interest rates at historic lows, it is hard to see yields falling from current levels, especially as some form of global economic revival is expected at some point, which most likely would dampen central bankers' enthusiasm for their quantitative easing programmes on both sides of the Atlantic. The flip side is that an economic recovery would be supportive of equity markets and, in turn, underpin the fund management fees earned from this asset class by the industry.
| COMPANY NAME | LATEST PRICE (P) | MARKET VALUE (£M) | PE RATIO | DIVIDEND YIELD (%) | PERCENTAGE CHANGE IN 2012 | LAST IC VIEW |
| ABERDEEN ASSET MANAGEMENT | 376 | 4,500 | 15.4 | 2.6 | 73.2 | Buy, 344p 26/11/12 |
| ASHMORE | 371 | 2,625 | 13.8 | 4.0 | 7.6 | Hold, 372p 18/10/12 |
| BREWIN DOLPHIN | 210 | 531 | 15.9 | 3.4 | 50.7 | Hold, 190p 5/12/12 |
| F&C ASSET MANAGEMENT | 102 | 564 | 17.5 | 3.0 | 56.2 | Hold, 70p 15/03/12 |
| HARGREAVES LANSDOWN | 699 | 3,315 | 28.9 | 2.3 | 58.2 | Hold, 633p 5/09/12 |
| HENDERSON | 138 | 1,537 | 11.0 | 5.2 | 29.2 | Hold, 107p 14/09/12 |
| JUPITER FUND MANAGEMENT | 290 | 1,329 | 16.0 | 2.7 | 28.3 | Buy, 225p 1/09/12 |
| MAN GROUP | 84 | 1,536 | 3.7 | 16.1 | -34.2 | Sell, 76p 24/07/12 |
| RATHBONE BROTHERS | 1,305 | 598 | 16.6 | 3.5 | 22.6 | Hold, 1,289p 26/07/12 |
| SCHRODERS | 1,759 | 3,976 | 16.6 | 2.2 | 28.3 | Hold, 1,315p 2/08/12 |
