The asset management industry is set for continued growth over the next couple of years, with professionally managed assets set to hit AUM of $132trn by 2027, according to the latest outlook from Broadridge in its annual review of global demand.
This equates to a compound annual growth rate of some 7.6%, which come despite some headwinds noted such as geopolitics, US tariffs and sticky inflation concerns.
Other key points of the report include:
- Active bonds defy shift to passive; Active fixed income is poised to attract $1.4trn in future three-year net flows – outpacing passive strategies and diverging from equity demand trends – with private credit’s rapid expansion reinforcing this shift.
- The APAC growth engine driven by retail; Demographic tailwinds-notably India’s expanding middle class-are set to underpin APAC’s projected organic growth, positioning the region as the world’s fastest-growing market over the next three years.
- Insurance continues to benefit from strong tailwinds; Insurance growth is set to accelerate, supported by factors such as rising premiums and structural shifts, such as the transfer of assets from DB schemes to insurer balance sheets via pension buyouts.
- Retail gaining market share against institutional; Retail investors are projected to hold 50% of global assets by 2027, up from 44% in 2018-marking a notable shift in market influence away from traditional institutional dominance.
North America will account for the largest absolute AUM growth, adding $14 trillion by 2027, though growth will slow. Meanwhile, APAC is emerging as a critical engine of growth, with organic growth expected to hit 6% CAGR, driven by expanding retail markets and regulatory reform. Europe including the UK will struggle as legacy pools contract and the macroeconomic environment remains fragile in the region.
The growth in North American AUM is notable for the amount attributed to US retail: some $29trn. US passive equities will continue to hold the largest global market share, the figures suggest. Yet Chinese active core bonds will also continue to attract investors.
Elsewhere on emerging markets, Nabeel Ansari, senior director – Global Growth Solutions at Broadridge, says the research “will still have EM Equities in our market view, it’s just that the product sets AUM is expected to grow at a rate that is slower than some of the other products on the list [of products types covered by the research]. For that reason, its market share drops out of our view of top 25 products in 2027 by market share (its rank based on market share drops to number 29 out of our long list of ~100 products we track on a quarterly basis).”
Global asset management revenue is expected to top $400billion by 2026. Yet, fee compression will remain a long-term challenge, especially in traditional public market active strategies. High-fee alternatives and innovation in private markets may help offset some of the margin erosion.
ETFs, particularly passive strategies, are projected to capture the lion’s share of new flows thanks to their low cost, transparency, and growing usage in Europe and APAC. Active ETFs are also gaining traction.
Alternatives are now leading by revenue share. Demand from both retail and institutional channels is rising, supported by regulatory innovation – such as that boosting US and EU pension scheme access to private markets.
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