01/07/2011
By Ilonka Oudenampsen
Global assets under management (AUM) have reached $53 trillion at the end of 2010, according to Cerulli research. Total AUM is now back to where it was in 2007, after it dropped to $43 trillion in 2008-2009.
While global assets recovered to 2007 levels in 2010, revenues rose with $12 billion to $162 billion at the end of 2010. Cerulli said total AUM could reach $76 trillion by 2015, while revenues will cross $200 billion.
There will be pressure on revenues for several reasons: reallocation away from equities to fixed income and cash; reallocation from active to passive and low-cost active; and the continued threat of competitive alternatives to mutual funds, and collectives in general.
Cerulli’s prognosis for Europe, beset by deep-seated economic woes, is slower asset growth and this is reflected in their five-year growth forecasts, which are down from a high of 10.3% in 2008 to the current estimate of 7.7% to 2015. However, they expect strong growth from markets like the UK and other northern European countries, creating a two-speed Europe.
Overall mutual fund growth in 2010 was almost half that in 2009, and were it not for an 8% growth in market appreciation, overall growth would have been negative, with the year ending with negative flows of 0.4%.
Europe had an overall 11.4% growth in mutual funds, with the UK and Germany having a growth of 20.2% and 4.8% respectively, while France had a negative 5.9% mainly due to big money market fund outflows.
According to Cerulli, European institutional investors are a major factor in the success of mutual funds, as they are big buyers of this investment vehicle, while very strong growth for Luxembourg and Dublin suggests the globalisation of the UCITs brand is also having the desired effect.
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