From Morningstar: 2024-05-02 09:51:00

Fund managers are facing challenges as their actively-managed products underperform ETFs. Morningstar analyst Mathieu Caquineau discusses how the rise of passive investing has impacted the industry, leading to layoffs in supporting functions. Asset managers like BlackRock are better positioned to adapt. Some firms, such as Abrdn and Fidelity, have announced cost-cutting measures without impacting investment roles.

Layoffs in the asset management industry have mostly targeted supporting functions to protect investment teams. Companies like Goldman Sachs, Morgan Stanley, and JPMorgan have announced job cuts, with Baillie Gifford and Lazard also trimming their workforce. Fidelity recently announced a significant plan to reduce headcount, raising concerns about potential impacts on investment roles and fund performance.

Morningstar emphasizes the importance of a strong team when rating funds, but recent layoffs have not yet affected the core capabilities of firms significantly. While front offices have been spared so far, continued monitoring will ensure any negative impacts on teams and strategies are reflected in ratings. Analysts like Mathieu Caquineau provide insights on industry trends and their implications for investors and asset managers.



Read more at Morningstar: A Wave of Layoffs in the Fund Management Industry