Assets Under Management Market Size, Share & Trends Analysis Report By Asset Class, By End-use, By Region, And Segment Forecasts, 2022 - 2030

Global Assets Under Management (AUM) flows have risen in the past decade, illustrating long-term growth and sustainability. The increase in global AUM values can be attributed primarily to growing interest and participation in diverse asset classes of capital markets. Additionally, the rise of alternatives such as cryptocurrencies and the resurgence of commodity trading during the pandemic (due to attractive valuations) have further supplemented AUM flows in addition to those in standard asset classes such as equity and fixed income. According to Bridge Alternative Investments Inc., an alternative asset class investments company, the top fifteen commodity-themed hedge funds have increased their AUMs by 50% to USD 20.7 billion in 2022.

Assets Under Management (AUM) Market Segmentation

The global Assets Under Management (AUM) are expected to witness growth over the forecast period due to the rising participation of retail and institutional investors as the global economy recovers from COVID-19. The interest rates on the bank and corporate deposits prevailed at all-time lows globally in 2020, compelling retail investors to enter equity markets for capital growth and appreciation. The initial phase of COVID-19 was plagued by economic uncertainty and a standstill in business activities. The negative sentiment was observed across asset classes, including equity, cryptocurrencies, and private debt, leading to plunging prices. The low valuations thus attracted institutional money into capital markets.

Institutional money, also known as smart money, could leverage the opportunity to hedge regional exposure by asset allocations to developed and emerging markets. For instance, emerging market indices represented by Morgan Stanley Capital International (MSCI) Asia ex-Japan and Morgan Stanley Capital International (MSCI) Emerging Markets (EM) were the top-performing indices in 2020 and Year to Date (YTD) until November 2022. However, developed market benchmark indices such as the US Standard & Poor (S&P) 500 and Morgan Stanley Capital International (MSCI) Europe ex-UK were top contributors in 2021. Retail and institutional investors alike seek a return on capital with risk management. Active tactical allocation and hedging strategies for adapting to the changing market conditions, with exposure spread across geographies, are expected to contribute to the AUM growth over the forecast period.

Passive investment strategies also gained traction in 2021. Passive funds are characterized by infrequent portfolio churning apt for a buy-and-hold approach and best suited for a long-term investment horizon. A British newspaper, The Financial Times, reported passive global investments surpassing USD 15 trillion in assets in 2021. The boom in Exchange Traded Funds (ETFs) valued it at USD 7.71 trillion in 2021, while index-tracking mutual funds were valued at USD 7.76 trillion. The drive to passive funds was due to their lower expense ratios and tax advantages over regular active mutual funds.

In a competitive environment, asset management companies constantly innovate to introduce new investment products and services to cater to the latest customer requirements. Environmental, Social, and Governance (ESG) sustainable investing and Real Estate Investment Trusts (REITs) are the newest investment trends garnering investor attention. Bloomberg Intelligence estimates ESG thematic investment AUM to be valued at USD 53 trillion by 2025, accounting for more than a third of the global AUM. Investors are incorporating the assessment of ESG scores of the underlying businesses they hold into their portfolio to understand actions taken to be sustainable through measures such as reducing carbon emissions. In terms of financial returns, investors expect ESG-compliant portfolios to outperform due to transparency and adherence to climate change and other regulatory norms. REITs are a well-developed asset class in established markets such as the U.S. and Canada; however, they are also gaining momentum in emerging markets due to attractive dividend yields and as a hedge to the housing market and inflation. Since 2019, three REITs, namely Embassy REIT; Brookfield REIT; and Mindspace REIT, have been listed on the Indian stock exchange. The growing investment landscape provides asset management companies with huge potential for an influx of new money, thereby increasing their AUM.

The key players in the Assets Under Management (AUM) industry include Blackrock, Inc.; UBS Group AG, The Vanguard Group, Inc.; FMR LLC (Fidelity Investments); State Street Corporation; Morgan Stanley; JPMorgan Chase & Co.; and THE BANK OF NEW YORK MELLON CORPORATION. Prominent players are leveraging technology to streamline AUM allocation and related reporting For instance, JPMorgan Chase & Co provides an automated investment service, a portfolio built by professional fund managers, managed by robo-advisors, and monitored by investment specialists. Streamlined operations and cost reduction also enable passing on the cost benefits to investors and real-time reporting keeping them updated with the latest developments affecting their portfolios.