Michael O’Brien head of relationship management at indexer Barclays Global Investors, said clients were upping their passive investments primarily because they were investing more with specialist fund houses and therefore needed to “offset the risk by putting the rest in the index”.
Watson’s survey found that specialist fund managers’ assets grew substantially last year, with the assets of specialists in the UK mushrooming by 80-96 per cent.
Indexing business is also flowing in from the “increased number of cash flow-matched mandates”, according to Mr O’Brien, as pension funds are finding that indexing is the best way to tailor returns to liabilities.
BGI, fifth in Watson’s ranking of assets under management, also benefited from the constant recycling of assets, said Mr O’Brien. “When big fund managers are blown up, the normal response is to shift the assets away from them and put the money with an indexer.”
RM
