Get ready for a strong recovery in 2011, as corporate profits will boost the markets, predicts kasina CEO Steven Miyao. By mid-year, positive flows into equities will exceed flows into bonds, he said.
Emerging markets will continue to outpace U.S. in the coming year, and asset management firms will focus more heavily on these products and investors, Miyao also said.
As the overall environment improves and corporations regain confidence in the economy, merger and acquisition activity will increase, he said. Miyao foresees large asset managers making “strategic acquisitions [of] small- to mid-size firms with entrenched brand names or specialized product expertise, to broaden their product offerings.”
Market share of the top 10 fund families will continue to grow, and advisers will use fewer products, he said. This will increase the importance of national accounts teams and prompt firms to hire more external wholesalers, compensated at pre-recession levels, Miyao continued.
In addition, he expects asset managers to continue to expand their focus on RIAs.
Also on the distribution front, Miyao expects smaller firms to increase their use of the Web as a sales tool, including the use of social media to engage with investors, advisers and institutional clients. Firms will even improve their website tracking and analytics tools, Miyao said. As mobile devices become more prevalent, asset managers will create more applications specifically for these devices.
On the product front, exchange-traded funds will continue to profilerate and actually account for one-third of all mutual fund and ETF flows, Miyao continued. “ETFs will finally start to gain traction on retirement platforms in a meaningful way,” Miyao said.
Finally, Miyao said, the bailout and increased deficit will make inflation-protection and tax-advantaged products popular in the coming year.