Portfolio Management in the US
Despite investors pushing toward passively managed funds with lower fees, the Portfolio Management industry has grown steadily over the five years to 2018. Financial markets play an integral role in assets under management (AUM) growth, and, consequently, base and performance fees earned by managers. Market indices, like the S&P 500, demonstrated strong growth over the five years to 2018. Growth in financial markets was supported by key macroeconomic variables rising during the period. While industry revenue has increased steadily due to AUM growth during the period, industry profit margins have declined due to pressure on industry expenses ratios as investors preference in investment strategies changes. Industry revenue is forecast to grow over the five years to 2023. Improving macroeconomic growth is expected to give way to sustained strength in financial markets during the period. As equity markets rise following macroeconomic growth and bond yields rise as the Federal Reserve continues its process of interest rate normalization, industry AUM and revenue are expected to rise as well.
The industry comprises firms that actively manage assets for clients. Portfolio managers have the authority to make investment decisions and generate revenue through fees that are based on service and portfolio performance. Industry operators manage assets for investment vehicles such as mutual funds, hedge funds and variable insurance products.
This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.