Global assets under management (AUM) are projected to cross US$70.4 trillion by the end of 2013-a full US$20 trillion higher than the industry’s low point in 2008, according to Cerulli Associates’ annual global markets report.
According to the report, this is a conservative estimate that may need upward revision if the global financial markets continue to perform as strongly in the rest of the year as they have in the first five months.
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Now in its 12th iteration, this annual report covering both retail and retirement asset management globally reports that non-US assets accounts for a more than 50% share of total assets, but the engine of growth remains the US, certainly in the near term.
The report pegs household financial assets in the US at US$30 trillion in 2012. Global mutual fund assets under management (AUM) as a share of household financial assets represented 38.8% of the total — the highest of 15 developed economies surveyed by Cerulli.
"It would be churlish not to feel a sense of optimism about the near- and medium-term outlook for the global asset management industry, especially when considering top-line growth," according to Shiv Taneja, Cerulli’s London-based managing director. He adds that even Europe has managed to add US$5.9 trillion in assets since 2008.
"The worry, however, is when considering bottom-line growth. Here the picture is less well-defined, as many firms-large and small-continue to have to deal with the effects of the financial crisis and margin pressure. The sunny uplands may beckon, but a good guide is going to be essential," says Yoon Ng, associate director at Cerulli, and one of the report’s key authors.
The report shows that only Japan is slated to show slower asset growth than Europe over the next five years to 2017.
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By GlobalData"Could it really get to be more than twice bigger than Europe, in asset terms, by 2017? It certainly appears so," Taneja said.
Cerulli’s prognostication suggests that Asia ex-Japan will continue to show the highest growth rate over the five years to 2017, but this top-line figure must be measured up against the region’s ability to generate consistently strongly bottom-line growth.
By investment objective, Cerulli expects equities to total 44.4% of global AUM in 2017, up from 43.5% this year. Over the same period, bonds as a share of global AUM are anticipated to hit 27.5% in 2017, as compared to 25.1% this year.
