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Report by Fund Buyer Focus

Gravitational Pull of Big Brands: Latest Research on Asset Management Brands in Europe

Gravitational Pull of Big Brands: Latest Research on Asset Management Brands in Europe
Photo: Walt Jabasco / CC-BY-SA-2.0, Flickr
  • Macroeconomic uncertainty and unsettled markets drove European investors to choose the fund houses they knew and trusted
  • Fund Buyer Focus demonstrates the pulling power of strong asset management brands in the annual evaluation of European asset managers
  • The gap between the brand leader, BlackRock, and its nearest rivals is widening
By Funds Society

Macroeconomic uncertainty and unsettled markets drove European investors to choose the fund houses they knew and trusted. The latest Fund Brand 50 analysis of cross-border third-party brands shows no change to the top six groups but the gap between the brand leader, BlackRock, and its nearest rivals is widening. According to research group Fund Buyer Focus, BlackRock outscored its competitors on most of the brand attribute measures evaluated by fund selectors.

The independent study measures asset managers’ relative brand attractiveness across ten brand drivers to provide cross-border, local market and distribution channel rankings. Findings from the study include the increasing role of brand in the fund selection process and the recent migration of buyers to the bigger fund houses. Commenting on this, Diana Mackay, director of Fund Buyer Focus says: “When investor confidence is low, brand naturally becomes more important in the fund-buying process with investors seeking the comfort and perceived stability of larger, familiar names. The ‘safe houses’, and particularly the brand leader, benefited from this trend in extremely choppy markets. The power of brand was also evident in the stickiness of some groups’ positions even though their flagship products were out of favor.”

Outside the top ten rankings, pricing pressures and regulatory changes fueled support for passive providers. iShares and Vanguard had the biggest impact on the cross-border rankings. But it was Vanguard that was the fastest riser – improving its FB50 ranking by 13 places over the year.

Four new groups gained sufficient recognition to enter the top 50 with highest new entrant, last year’s boutique winner Flossbach von Storch, extending its brand reach into new markets and gaining 32nd place. Meanwhile, the US group, T. Rowe Price saw its investment in developing its retail presence realized by increased recognition in multiple markets and 46th position.

But it was not just about the brand giants. At the other end of the asset management scale, boutiques had another good year. The Nordic boutique Lannebo Fonder moved up two places to take the boutique brand crown. Lannebo Fonder’s success reflected a trend in this year’s rankings of investor appetite for generating yield from investing in local specialists.

“Interest in specialist alpha-generating managers remained strong, helping to put new and more established niche managers in the spotlight. But even for these small groups, fund selectors placed great emphasis on the importance of corporate consistency, ranking the stability of the investment management team as the most influential brand driver,” explains Diana Mackay.

Top 10 cross-border groups ranked by Total Brand Score

 

About the research

The Fund Brand 50 (FB50) report is sponsored by Broadridge and FERI EuroRating Services. The Fund Buyer Focus FB50 report is an annual study monitoring the influence of brand on third-party fund selection. The study is based on intensive interviews with nearly 1,000 of Europe’s most significant fund selectors in ten key markets. These selectors account for EUR 2.2 trn of third-party assets.

Fund selectors are asked to name their top three suppliers on the basis of ten brand drivers including: appealing investment strategy, client orientation, innovation and solidity. Answers to these and other preference questions are scored using an algorithmic process that produces a ‘Total Brand Score’, on which groups are ranked.

 The research is conducted by Fund Buyer Focus, the Berlin-based subsidiary of MackayWilliams LLP  (London).

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