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Passive giants take global AUM to $94trn

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Global passive assets under management grew by 25% last year as Blackrock, Vanguard and State Street topped the rankings in terms of AUM.

Data from Willis Towers Watson’s Thinking Ahead Institute found the total AUM of the world’s largest 500 asset managers grew to $93.8trn (€82.5trn) in 2017, an increase of 15.6% from 2016.

Blackrock held its place as the world’s largest asset manager by AUM with $6.3trn, a position it has held since 2008. Vanguard and State Street completed the top three for the fourth consecutive year with $4.9trn and $2.8trn, respectively.

Bob Collie, head of research at the Thinking Ahead Institute, said: “Once again, total assets have increased; the rate of growth in 2017 is the biggest since 2009. The names at the top of the ranking are familiar names. There’s greater concentration in the biggest names.”

The last decade has seen an increase in the representation of managers from North America and emerging markets such as Brazil, China and South Korea. In contrast, asset managers from Japan and some other European markets have lost market share during this period.

However, European managers increased their participation in the Top 20 by one member, to 8 (see chart).

Passive outshines active

Active strategies continued to dominate the share of AUM in 2017 at 77.6%, but the proportion of passively-managed assets has consistently increased from 19.5% to 22.4% over the last five years.

In 2017, passive assets experienced a year-on-year AUM growth of 25%, compared with active assets which grew 16.9% in the same period.

Total assets managed by leading passive asset managers grew at 19.5% in 2017 compared with 15.6% for managers in the top 500. The compound annual growth rate of assets over the past 10 years has been 9.5%.

Growth by region

In terms of AUM growth by region, Europe grew at 15.8% and North America grew at 15.1%, while Japan grew at 12.6%.

However, over the past five years China and India have led the growth in AUM. China’s AUM has grown 21.7% in US dollar terms (22.4% in local currency) while India’s has grown 21.6% in dollar terms and 25.3% in local currency.

This compares with 8.5% growth in AUM for the US in US dollars over the same period.

The increasing strength of the USD has generally had a dampening effect on the growth rate in assets recorded by asset managers in the survey. This is particularly evident in Australia, Canada, the Eurozone, Japan and emerging markets such as Brazil and South Africa, the group said.

Source: Willis Towers Watson

Sebastian Cheek

Sebastian joined Last Word Media in 2017 as editor of Portfolio Adviser. He previously spent 10 years as a journalist and editor in the UK institutional investment sector, most recently as editor...

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