Fund industry was optimistic about 2020
Due to the bullish stock markets, the fund industry in Germany looked back on a good year in autumn 2019 - and was equally optimistic about 2020. Surveyed regarding their business prospects in 2020 50 percent of the fund companies estimated their situation to remain good, while 25 percent expected their earnings situation to improve or even improve significantly in 2020. However, geopolitical risks and a negative stock market trend were considered the greatest risks.
Fund industry benefits from investors' search for returns
According to the industry, very strong or major business impulses for 2020 will come from the unchanged low interest rates (57 percent), which will drive investor demand for profitable investment products such as funds. Impulses are also expected from the search for alternative investment products (51 percent). Respondents cite sustainability (60 percent) as a very large or large growth driver.
Geopolitics and stock market development are considered the greatest risks
The fund industry fears that geopolitical uncertainties (64 percent), a negative development on the stock markets (56 percent) and increasing regulation (48 percent) will be a burden on industry growth.
Margin pressure and regulation burden
When asked what major challenges they expect to face, the industry cites the increasing pressure on margins and costs (79 percent) and the burdens of increasing regulation (73 percent).
Exercising shareholder rights gets more weight
65 percent of the industry believe that the exercise of shareholder rights will become increasingly important in the future. This is followed by the use of passive investment products (50 percent). The use of artificial intelligence comes only in third place with 32 percent.
Performance fees are also becoming more important
44 percent of the industry believe that performance fees are becoming increasingly important. Only 9 percent think that performance fees will become the standard. 34 percent expect no change.
Investment companies pursue different sustainability strategies
When it comes to sustainability, investment companies pursue very different sustainability strategies (52 percent). Exclusion criteria and active engagement are in first and second place, with 46 percent each. Almost one third use the best-in-class approach.
Industry digitalises above all its processes
The industry would like to digitalize the processes in daily business more. It wants to invest above all in the digitisation of processes in fund administration (65 percent), the modernisation of IT and (53 percent) in cyber security (47 percent). The fund industry therefore wants to build up appropriate personnel (40 per cent), especially in IT. However, the fund industry is also looking for experts in portfolio management (37 percent) and sales (34 percent).