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Financial research report page / conference presentation slide
File Size:
1.31 MB
Summary
This document is page 5 of a presentation from the Bank of America Merrill Lynch '2016 Future of Financials Conference' held on November 17, 2016. It presents survey data from investors on their outlook regarding fixed income vs. equity performance, the market share of active vs. passive investing, and M&A activity. The document contains no information, names, locations, or events related to Jeffrey Epstein.
Organizations (2)
| Name | Type | Context |
|---|---|---|
| Bank of America Merrill Lynch |
Host of the '2016 Future of Financials Conference' and publisher of the document.
|
|
| BofA Merrill Lynch Global Research |
Cited as the source for the data and charts presented in the document.
|
Timeline (1 events)
2016-11-17
The '2016 Future of Financials Conference' was held, during which an audience of investors was polled on their outlook for various financial sector trends.
Not specified
Investors
Audience
Key Quotes (1)
"do you see improving cyclical demand for active management, despite structural headwinds, and if so where do you think active/passive share settles?"Source
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Quote #1
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Complete text extracted from the document (2,013 characters)
Chart 6: What is your outlook on fixed income performance and flows versus equities?
60%
52%
50%
40%
30%
24%
20%
16%
8%
10%
0%
Weaker FI performance & flows / Stronger equity performance & flows
Weaker FI and Equity performance & flows
Flat FI performance & flows / Flat equity performance & flows
Stronger FI and Equity performance & flows
Stronger FI performance & flows / Weaker equity performance & flows
Source: BofA Merrill Lynch Global Research
60%
52%
50%
40%
30%
24%
20%
16%
8%
10%
0%
Weaker FI performance & flows / Stronger equity performance & flows
Weaker FI and Equity performance & flows
Flat FI performance & flows / Flat equity performance & flows
Stronger FI and Equity performance & flows
Stronger FI performance & flows / Weaker equity performance & flows
Source: BofA Merrill Lynch Global Research
Active vs passive outlook – passive to continue to gain share
Given the ongoing shift to passive investing from active, we polled the audience to see where they think the share split between the two styles eventually settles. Currently the share split is roughly 70% active and 30% passive which was the least popular answer (10%) when asked “do you see improving cyclical demand for active management, despite structural headwinds, and if so where do you think active/passive share settles?” Most investors do see improving cyclical demand for active management and think passive will eventually control 40% of the market (50%) while 40% of respondents do not see improving trends for active and that passive will eventually capture 50% of the market.
Given the ongoing shift to passive investing from active, we polled the audience to see where they think the share split between the two styles eventually settles. Currently the share split is roughly 70% active and 30% passive which was the least popular answer (10%) when asked “do you see improving cyclical demand for active management, despite structural headwinds, and if so where do you think active/passive share settles?” Most investors do see improving cyclical demand for active management and think passive will eventually control 40% of the market (50%) while 40% of respondents do not see improving trends for active and that passive will eventually capture 50% of the market.
Chart 7: Do you see improving demand for active & where do you think active/passive share settles?
60%
50%
40%
30%
20%
10%
0%
Yes, but structural will persist, with share heading to 60% active / 40% passive
No, and structural will persist, with share heading to 50% active / 50% passive
Yes, with the share settling near the current 70% active / 30% passive
Source: BofA Merrill Lynch Global Research
60%
50%
40%
30%
20%
10%
0%
Yes, but structural will persist, with share heading to 60% active / 40% passive
No, and structural will persist, with share heading to 50% active / 50% passive
Yes, with the share settling near the current 70% active / 30% passive
Source: BofA Merrill Lynch Global Research
M&A activity likely to rise
Given a recent pickup in M&A and pressures within the industry that will likely continue the trend, including rising regulatory costs, some fee pressure, and active outflows, we asked investors their outlook for M&A in the sector. We found that the majority think
Given a recent pickup in M&A and pressures within the industry that will likely continue the trend, including rising regulatory costs, some fee pressure, and active outflows, we asked investors their outlook for M&A in the sector. We found that the majority think
Bank of America
Merrill Lynch
Merrill Lynch
2016 Future of Financials Conference | 17 November 2016 5
HOUSE_OVERSIGHT_014319
HOUSE_OVERSIGHT_014319
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