Fund groups see profits fall 3% in 2016 as industry reaches 'turning point'

New business flows down 80%

Active fund management houses failed to increase profits despite growth in assets under management in 2016, as the industry struggles in a competitive climate.

According to a report by McKinsey compiled for FTFm, worldwide profits for mutual fund companies fell 2.9% to €66bn during 2016.  This is despite total assets under management across these firms rising by 3% to €66trn, a dynamic McKinsey called a "remarkable turning point".  The report pinned the fall in profits on higher operating costs, which rose 4.8% during 2016, pressures on revenue and competition from passive providers. Moody's: Active management will shrink substantially as passive popularity grows  During the year, new business inflows for traditional fund managers fell...