Trade wars a key concern for local fund managers: IMAS
SINGAPORE (Jan 23): This year, Singaporean fund managers’ top concern is the trade wars, according to the Investment Management Association of Singapore (IMAS) annual Investment Managers’ Outlook Survey.
The survey showed that 68% of respondents identified trade wars as their top concern. Rising political risks and security tensions (49%), as well as rising uncertainty in US policy making (42%) also ranked high on the list as top concerns for fund managers in 2019.
Apart from the geopolitical issues, other concerns and challenges include rising costs and challenges associated with margin compression through competition (68%), as well as lower returns due to rising regulatory compliance costs (36%) and rising costs of governance (32%).
However, 58% of fund managers said that increasing client demands for innovative products is the top future driver of investment growth in the next three years, while 47% believe that the adoption of ESG investments will increase client demand and 45% say that the use of Fintech in fund distribution channels will boost demand.
The top strategy choices by fund managers this year are absolute return (43%) and ESG/impact-focused strategies (43%), followed by multi-asset (38%) and private markets, including real estate and infrastructure (38%).
Business-wise, 53% of fund managers anticipate that the threat of an economic slowdown would have the most impact on their businesses in the next 12 months, while new distribution channels (45%) and rising business and regulatory compliance costs (43%) are also seen as top threats to businesses.
Nicholas Hadow, Chairman of IMAS, says, “It’s no surprise that with geopolitics continuing to take the centre stage globally, trade wars have become the top concern for investment managers in Singapore. We’re not out of the woods by any means, and given the impact this has had on markets so far, fund managers will be looking to see how this will develop further and consider how it will impact their businesses in the short and long term.”
“Investment managers in Singapore are also leveraging new opportunities as they see the value in longer-term sustainable potential brought about by absolute return and ESG strategies. Even though the market is increasingly competitive, new technologies will continue to be a key driver of growth, and as an industry, we are working to identify problems that could be fixed by FinTech solutions,” adds Hadow.
