Following two years of lean flows but strong markets, the Canadian investment funds industry welcomed 2011 with hopes of reverting to its pre-bear market expansionary track. The year began with re-energized sales activity during the RRSP season and green shoots of a gentle comeback for equity mandates. But the positive mood and sales momentum quickly evaporated as equity markets fell back amidst the exaggerated volatility of the second half of the year.
The 2012 Insight Annual Industry Review—our 13th—locates the 2011 experience in the broader context of the overarching industry themes and trends. The reduced expectations for the expansion of the Canadian household financial wallet—in the below 6% CAGR range over the upcoming decade, as laid out in the 2011 Household Balance Sheet Report—will act as a tighter constraint to the fund industry’s growth potential. In short, the financial wealth pie will grow at a slower rate, and so will the funds industry. Meanwhile, in the past decade the fund share of the wealth pie itself has stagnated.
Fund companies have begun to adapt to the new normal of slower growth, intensifying economic pressures, evolving product structures, and a changing competitive landscape. Increasingly, fund industry participants view themselves as asset managers and competing for clients and acquisition targets on a global basis. Managed money is the fund companies’ new business paradigm and world is its oyster. For more please see the January 20122 issue of the Insight Advisory Service at http://investoreconomics.com/issue/insight-advisory-service. Posted by Goshka firstname.lastname@example.org.