Global Asset Management Industry Faces Various Challenges As It Struggles To Provide Returns

Global Asset Management Industry Faces Various Challenges As It Struggles To Provide Returns

June 30, 2016 0 By QXa5edb7jD

Asset Management Industry which is worth $14.3 trillion is currently facing numerous challenges in its struggle to provide returns. The size of asset management industry was worth $3.2 trillion in the year 2005. Back in 2013, the industry attained a record $7.2 trillion. By that time, there was a lot of money flowing into world’s asset management industry. Most investors were thinking that the money would generate more returns.

According to Lawrence D. Fink, hedge fund industry has registered weak performance in the past few years.He expects that different asset managers from all over the world will come together, consolidate their efforts as well as chat on the way forward. Leaders in asset management industry will take into consideration his idea and see if it will work. The implementation of his suggestion will depend on the performance of the struggling industry. Lawrence D. Fink is the founder of BlackRock.

Global Asset Management Industry

BlackRock is the largest asset management company in the world. It manages assets worth $3.6 trillion. Lawrence Fink said that he made BlackRock the biggest money management firm globally by making some acquisitions. He also expressed his opinion saying that the basic strategy for asset management has been losing ground in the recent past. This is because fund managers are involving themselves in efforts to beat industry benchmark index thus diverting focus.

Fink added that majority of fund managers find it difficult to get alpha from the investments they make. Alpha is the return of portfolio which is usually in excess in comparison with benchmark index. This is a very important factor that should be considered by each and every investor in asset management industry. It helps them to gauge how different fund managers perform so that they can make the right choices. It prevents them from choosing fund managers with poor performance record and instead go for those with a good record of success.

Here Are The 5 Best Mutual Funds

  • Usgi World Precious Mineral
  • Usgi GLD & Prec Metls
  • Gabelli Gold Fund Inc
  • Amer Cent Global Gold
  • Fidelity Select Gold Port

These Are The Best Management Companies In 2016

  • Gabel Funds LLC
  • Fidelity Selectro LLC
  • US Global Investors Inc
  • American Century Investment Management Inc

US Global Investors World Precious Minerals Fund is considered to be the best performer in the industry after registering returns of up to 68.9{bdbbbf61f95330256c4a8626245213c737e8efb191a712bf52e8edc213ed162f}. This is the highest percentage of returns realized in 2015. This top performing fund is managed by US Global Investors Inc. Its net asset is worth an impressive $158.4 million. According to a report that was released on 31st May 2016, this outstanding fund returned a high percentage of 82.1{bdbbbf61f95330256c4a8626245213c737e8efb191a712bf52e8edc213ed162f}.

It is important to note that of all the best performers, most people invest funds in precious minerals and GLD. There was reduction in the benchmark index of SPY in 2015. It returned -0.77{bdbbbf61f95330256c4a8626245213c737e8efb191a712bf52e8edc213ed162f}.

The equity market of FXI was negatively affected by the turbulence in China economy. This is why Equity mutual funds could not register good results in 2015. It follows active management strategy.