Grygo is the chief content officer for FTF & FTF News.
Despite volatile markets last year, the current Fund Brand 50 (FB50) rankings of the best-performing, third-party asset management brands revealed that seven of the top 10 asset managers held the same position in 2022 as they did the year before.
The annual study is sponsored by Broadridge Financial Solutions, a provider of securities operations systems, services, and software.
From first place to seventh, the top FB50 firms for 2022 are: BlackRock, Vanguard, Capital Group, Fidelity, JPMorgan AM, PIMCO, and T. Rowe Price. Franklin Templeton took eighth place, Dimensional Fund Advisors ninth, and Goldman Sachs tenth.
“The independent study measures and ranks asset managers’ relative brand attractiveness based on fund selector perceptions: taking into account 10 brand attributes to reveal the top U.S. and global brands,” according to Broadridge.
“The top-seven firms maintained their positions from last year, while the rest of the top 10 shuffled positions. Firms lower down the rankings struggled to make gains and break into these coveted positions,” according to Broadridge. “Amid a turbulent climate, fund buyers were reluctant to make new engagements, and larger firms shored up their position at the top end of the leaderboard.”
Overall, the study finds that “U.S. fund buyers wanted a wide range of products to choose from and favored asset managers that could offer this. However, this desire for choice accompanied a risk-off stance, as selectors relied heavily on a smaller core of safe investments,” according to Broadridge. “This led to a proliferation of products vying for limited ‘shelf space.’ Despite a potential oversupply of U.S. fund products, the supermarket style offering of brands like BlackRock remained popular with fund selectors.”
U.S. fund buyers looked for “the security of tried-and-tested products with regular income components and low risk while displaying a preference for established brands with a proven track record of high performance,” adds Jeff Tjornehoj, senior director of distribution insights for Broadridge, in a prepared statement.
“Asset managers jostled to differentiate themselves by developing their product offering and increasing transparency. But the overall effect was something of a closed shop, as fund selectors doubled down and largely kept their business where it was,” Tjornehoj says.
“Unsurprisingly, U.S. fund selectors valued ‘Solidity’ highly in such a volatile climate, ranking that attribute as the second most important factor in their selections — as they did in 2021. ‘Knowledge and understanding of the markets,’ ‘Client-oriented thinking’ and ‘Experts in what they do’ made up the remainder of the top-five brand attributes,” according to Broadridge
The researchers also found:
- “Product development led the way for fund selector preferences in 2022. The steady rise of model portfolios proved a differentiator — Broadridge’s proprietary algorithm has identified over 15,000 models in use as of year-end 2022. Asset managers are frantically deploying new models to latch onto trends such as ESG, tax aware and proprietary and hybrid models;”
- “ETFs also proved a differentiator, particularly as they marked firms out as innovative and able to adapt quickly to new market realities;” and
- “Transparency of fees and portfolios also proved a competitive advantage for asset managers. Direct indexing technology is becoming a must-have function, as major asset managers jockey for position with financial advisors.”
The Broadridge Fund Brand 50 report monitors the influence of brands on third-party fund selection.
“The study is based on intensive interviews with more than 1,200 of the most significant fund selectors in Europe, the U.S., and APAC,” according to Broadridge.
The fund selectors pick their top-three suppliers across the following 10 brand attributes:
- Appealing investment strategy
- Solidity
- Knowledge of the market where they operate
- Client-oriented thinking
- Expert in what they do
- Thinks and acts globally
- Keeping best informed
- Stability of the investment management team
- Innovation/adaptation to market change
- Social responsibility/sustainability
The answers from the fund selectors and “commentary from other preference questions, are collated using statistical analysis and transformed into a ‘Total Brand Score,’ on which groups are ranked,” according to Broadridge.
More information about FB50 can be found here: http://bit.ly/42G7r3U
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