Three Trends From 2020 That Might Shape The Future Of The European Fund Industry

Another trend that can have a significant impact on the future of some asset managers is the massive outflows from alternative UCITS products (-€78.12 bn) during a year in which alternative investment strategies could have proven their strength, especially during the market turmoil in March. But as the trend shows, investors seem to be disappointed from the results of alternative UCITS products, as 2020 may mark the third consecutive year with outflows from these kinds of products.

These three trends have the potential to become the main drivers for product development and fund flows in Europe for 2021, as it is to be expected that investor demand for passive solutions and ESG strategies will continue in 2021 and the years beyond. This means that fund promoters in Europe have to modify their product ranges accordingly to capitalize on these trends. I would go even one step further and say that asset managers who fail to adapt to these two mega-trends may face massive outflows which may have the potential to change the European fund industry landscape. The same is true for alternative UCITS products, as the outflows from these products may lead to the closure of a high number of funds with the respective impact for the concerned fund promoters in the future.

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