German equities least competitive asset class in Germany

Research by Fundamental Media finds that one manager dominates the brand recall among financial intermediaries 

Key points: 

• A question in Fundamental Media’s Global Brand Survey centres around intermediaries’ ability to name asset management brands in relation to various asset classes and management styles, providing insights on the competitiveness of each asset class and management style. 

• For German equities, one asset manager was recalled by more than 75% of intermediaries, with the other recalled companies being mentioned by less than 15% of respondents. 

• The second least competitive asset class in Germany is multi-asset, while the most competitive asset classes are alternatives, fixed income and emerging market equities. 

The German equity market is not competitive at all, unlike most other asset classes which are relatively competitive in Germany, research by Fundamental Media has found. 

For the 2024 Global Brand Survey, Fundamental Media surveyed 175 financial intermediaries in Germany from June to September 2023. One of the questions centred around intermediaries’ ability to name asset management brands in relation to various asset classes and management styles. This provided us with insights on the competitiveness of each asset class and management style. 

The German intermediaries recalled 193 unique asset management brands across the 15 prompted asset classes and management styles. Among the asset classes, the highest number of brands were recalled in alternatives, fixed income and global equities with the fewest unique brands mentioned in German equities and real estate. 

Despite the high number of companies mentioned in each asset class and management style, for some asset classes a handful of managers were mentioned significantly more often than other managers, while in other asset classes the mentions were more equally divided across all managers.  

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. 

For German equities, for example, one asset manager was recalled by more than 75% of intermediaries, with the other recalled companies being mentioned by less than 15% of respondents. This makes German equities the least competitive asset class in Germany. However, our research also revealed that intermediaries plan to decrease their clients’ exposure to German equities (51% plans a decrease versus 8% who plan an increase).  

The second least competitive asset class in Germany is multi-asset, while the most competitive asset classes are alternatives, fixed income and emerging market equities. While intermediaries are divided on their intention to increase or decrease exposure to multi-asset and alternatives, 43% are expecting to increase fixed income (vs 20% who plan a decrease) and 39% are planning an increase in emerging market equities (vs 16% who plan a decrease). Fixed income and emerging market equities therefore offer the best opportunities for asset managers to improve their brand positioning in the German market due to the combination of higher competitiveness and intermediaries’ interest.  

Looking at the recall for different management styles, smart beta and absolute return are the most competitive, while ETFs is by far the least competitive, followed by active management. But while intermediaries mentioned the highest number of unique asset management brands in active management, the number of unique brands mentioned in ETFs is only 22. 

Active management is relatively popular at the moment, with 45% of intermediaries planning an increase and 10% a decrease. However, absolute return and smart beta are both likely to see outflows, with 32% of intermediaries planning a decrease in absolute return (vs 9% who plan an increase) and 22% planning a decrease in smart beta (vs 4% who expect an increase). 

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