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Blackrock, J.P. Morgan say active management, multi-asset to gain traction
Active management strategies and multi-asset solutions are becoming more attractive to cash-rich Asian investors as they cope with low yields, uncertainty and volatile markets.
Bayani S Cruz 21 Jul 2016
Active management strategies and multi-asset solutions are becoming more attractive to cash-rich Asian investors as they cope with low yields, uncertainty and volatile markets.
 
This is the reason such strategies are gaining traction in Asia, observe Blackrock and J.P. Morgan Asset Management, both of which are leading providers of actively-managed funds and multi-asset solutions.
 
“Evidence will show that both corporates and retail investors are holding a lot of cash and low-yielding assets right now as a result of this very uncertain environment. We think people realize that they will need to look for other areas or sources of returns,” says Belinda Boa, head of Active Investments Asia Pacific at Blackrock.
 
Active management strategies, which do not follow a benchmark but rely mostly on stock-picking and asset allocation, are able to generate returns even in the current low yield environment.
 
“If you look at the money that’s coming in through our firm, we see majority comes from active management. Growth is not really captured in the overall passive management strategy so I think that’s one thing that most clients have realized. For example the European equity market itself does not truly reflect the European economy at this point,” says Ben Luk, global market strategist at J.P. Morgan Asset Management.
 
Luk says that for J.P. Morgan the money that comes in the form of active management strategies are in the form of fixed income funds since bond funds have been a good hedge especially during the first half of 2016.
 
Multi-asset solutions on the other hand rely on diversification strategies to generate return through a smart combination of equities, fixed income, and alternative asset classes.
 
“The second area that you see area that we see attracting flows in our Asian business is through the multi-asset solutions business. That’s one area that allows investors to just invest, but lets the investment professionals who really understand the macro environment to decide what proportion will be put into either the Reits, equity or fixed income market,” Luk says.

“Multi-asset investing is clearly one of the biggest opportunities that we have. The ability for us to be able to combine a diversified platform of what we manage, whether it’s active and passive, into investment solutions for clients that are looking either for income or lower volatility strategies, is something that we think will be enormously important in the growth of where people put their money in the future,” Boa says. 

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