Asset management resists Covid-19 stress test

Posted on Jan 4, 2021, 12:00 PMUpdated Jan 4, 2021, 6:08 PM

The year 2020 will have condensed all the fears and hopes of asset managers. The first confinements in March set the tone, with the historic crash of the world stock markets and the dizzying fall in oil prices. Before the support measures of central banks and stimulus plans of developed countries keep the economy on a drip. So much so that the performance of many funds, boosted by the stock market rally of recent months, would almost make you forget the economic slump caused by the Covid-19. On the other hand, the cuts in interest rates dampened hopes of seeing bond yields rise again for a long time, especially for well-rated government securities with almost zero interest.

“The crisis is more of an accelerator of underlying trends than a real disruption for asset management, which is an industry closely linked to the real economy”, estimates Pierre-Ignace Bernard, senior associate director at McKinsey, co-head of the financial services division in Europe. “Asset management continues to face multiple challenges: pressure on margins, strong competition and a continued outflow from” active “management”, adds Nathan Flanders, global head of non-bank financial institutions at Fitch Ratings, who maintains his negative outlook on the sector. The situation hasn’t really changed in a year, but there are some additional risks due to periodic episodes of virus-related market volatility. “

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