Cerulli attributes the rise of ‘explaining your investment philosophy’, which was ranked bottom on the challenge-list just a year ago, to ‘a shift toward a more client-centric market’. A better explanation, however, could be the fact that absolute return funds, whose strategies are often less straightforward to explain, are fast becoming an important part of asset managers’ fund offerings.
Having the right product range to fit with buyers’ asset allocation is the most important challenge signalled by asset managers (see chart above). This finding corresponds with anecdotal evidence gathered by Expert Investor Europe. Many European fund selectors are frantically looking for absolute return funds, but tell us they struggle to find good funds in the long/short space.