ETFs and Swiss equities the least competitive asset classes in Switzerland

Research by Fundamental Media also reveals the asset classes and management styles that are in vogue 

Key points: 

• Swiss intermediaries recalled 192 unique asset management brands across 15 prompted asset classes and management styles. 

• When looking at the variability in the number of mentions within each asset class, alternatives and emerging market equities showed the lowest standard deviation, suggesting that these asset classes are more competitive than the others. 

• Absolute return and smart beta showed the lowest standard deviation, making them the most competitive management styles, while ETFs is by far the least competitive. 

Alternatives and emerging market equities are the most competitive asset classes in Switzerland, while ETFs and Swiss equities are the least competitive, research by Fundamental Media revealed. 

For its Global Brand Survey 2024, Fundamental Media surveyed 56 financial intermediaries in Switzerland from June to September 2023 to get a clearer picture of their perception of asset management brands. One of the questions centred around their ability to recall brands they associate with different asset classes and management styles. These responses provide insights into the competitiveness of each asset class and management style. 

Swiss intermediaries recalled 192 unique asset management brands across the 15 prompted asset classes and management styles. Respondents mentioned many brands in all 15 categories, but for some asset classes and management styles there was a wider variety of mentions across a lot of brands while for others the mentions gravitated towards only a few managers, indicating a lot less competition in those asset classes and management styles. 

To better understand the competitiveness of each asset class and management style, we looked at the standard deviation in the number of mentions. A low standard deviation in the number of mentions within an asset class or management style indicates that the mentions are more evenly distributed among the different brands within that category. This suggests a more competitive environment because no single brand overwhelmingly dominates the market. Instead, many brands are receiving similar levels of attention, implying that none have a significantly larger market share or recognition than the others. 

In contrast, a high standard deviation means that the mentions are more unevenly distributed, with a few brands receiving many more mentions than the others. This indicates less competition, as the market is dominated by a small number of leading brands. 

In conclusion, in more competitive asset classes and management styles, companies who put much effort into increasing their visibility might be able to gain market share and move up through the ranking faster compared to less competitive asset classes and management styles, where more effort and time might be needed to reduce the gap with the most established brands.  

Intermediaries mentioned the highest number of unique brands in fixed income, followed by European equities, while only 30 different companies each were recalled in real estate and Swiss equities.  

When looking at the variability in the number of mentions within each asset class, alternatives and emerging market equities showed the lowest standard deviation, suggesting that these asset classes are more competitive than the others. On the other hand, Swiss equities and, to a lesser extent, North American equities showed a higher standard deviation, making them the least competitive asset classes in Switzerland.  

Although some asset classes are more competitive than others, offering asset managers the opportunity to gain market share by differentiating themselves from their competitors, not all asset classes are in vogue. 

While Swiss equities show the least competition, it is the asset class that is most likely to see inflows in the coming year, as 62% of intermediaries plan to increase their clients’ exposure to Swiss equities versus only 5% who plan a decrease. Emerging market equities are also seeing more interest, with 40% of respondents planning an increase vs 20% expecting a decrease. Compared to Swiss equities, emerging market equities may provide better opportunities for asset managers looking to improve their market positioning as it is a more competitive asset class. 

Within the management styles, respondents mentioned the highest number of unique brands for active management, while ETFs saw the lowest number of different asset managers recalled. 

Absolute return and smart beta showed the lowest standard deviation, making them the most competitive management styles, while ETFs is by far the least competitive. 

However, ETFs are one of the management styles that are most likely to see an increase during the next year, with 48% of intermediaries planning an increase in exposure vs 9% who are planning a decrease. Meanwhile, smart beta and absolute return are expected to see outflows, with respectively 31% and 33% of intermediaries planning a decrease, compared to 10% and 20% who plan an increase. 

For full access to the GBS report, visit our dedicated Global Brand Survey page.