7 White Paper Ideas for Asset Managers in 2019
Frank Kalman
Content Strategist | Editor-in-Chief | Writing Coach | Editorial Consultant
If you’re a financial services marketer, 2019 should provide no shortage of opportunities for you to show your expertise and weigh in on topics that your clients are curious about.
As we head into what should be a pivotal year for financial markets and the U.S. economy, our latest e-book features 19 ideas for topics that will be ripe for white papers, bylined articles, and other forms of thought leadership in 2019.
In a series of upcoming blog posts, I plan on writing about different white paper and other forms of thought leadership ideas for different segments of the investment management industry.
Here, we'll start with institutional asset management, with future blog posts featuring ideas for marketers in the private wealth management, investment banking, private equity, venture capital, and professional services industries.
Of course, if you want to read all 19 of my ideas for financial marketers in 2019, you can download our e-book at the end of this post.
For now, here are seven white paper ideas for financial marketers in the asset management industry for 2019.
1. Europe’s Post-Brexit Investment Landscape
It’s been more than two years now since Britons voted for the United Kingdom to leave the European Union, and the U.K.’s politicians still can’t agree on a plan to make it happen by the scheduled March 29 exit date. Put simply, there’s no one version of Brexit that lawmakers on all sides of the U.K. political spectrum can agree on, with Prime Minister Theresa May stuck in the precarious position of trying to work out the complexities of an exit plan that appeals to constituents who are deeply divided on many of the core unresolved issues.
The chaos has thrown multiple outcomes on the table, including a second referendum that would reverse Brexit altogether. While that outcome is unlikely, the uncertainty creates an opportunity for institutional asset managers to explain what the current chaos and potential outcomes would mean for sectors and valuations in Britain and continental Europe.
2. Active Vs. Passive Management
As ETFs, index funds, and other forms of passive investment strategies continued gaining market share in recent years, 2018’s return to a more volatile market environment has served as an opportunity to ignite a renewed conversation about the advantages of active management. During what is now a nearly decade-long bull market, it has been easy for investors to ride the rising tide through passive strategies. But 2018’s return to volatility—and concerns that a recession could be looming—has caused some investors to rethink this approach and seek downside protection.
More than $46 billion was redeemed from U.S. stock mutual funds and ETFs between Dec. 5-12, 2018, the largest weekly outflows since Lipper began tracking weekly flows in 1992, according to MarketWatch. Meanwhile, money market funds, seen as a haven, saw inflows of $81.2 billion during the same period, according to Lipper.
Passive management supporters might argue that waiting out short-term volatility is a better path forward—while active managers may view this as an opportunity to showcase the benefits of using sector rotation and fundamental analysis to provide downside protection. Regardless of which side of the debate you’re on, you’ll want to explain your rationale for which approach will deliver the most value for investors in the new market environment that we are entering.
3. Return of Volatility
The jolts that shook markets in early February had many proclaiming a return of volatility, and the December correction that punctuated a particularly rocky fourth quarter confirmed it. Indeed, after years of relative tranquility in global markets, banks’ trading desks the world over likely cheered the return of such turbulent waters. But the bigger question for investors: What drove volatility so low in the first place?
While February’s swoon may have appeared more head-scratching, as continued U.S. economic expansion and strong corporate earnings growth suggested a healthy market environment to start 2018, uncertainty surrounding the impact of trade tensions between the United States and China, as well as concerns about the Federal Reserve’s planned pace of interest rate increases for 2019, took a toll on investor confidence in the second half of the year. These concerns are prime opportunities for investment professionals to showcase their expertise by cutting through the noise of the market herd to identify the factors that will fundamentally drive corporate performance and economic growth.
4. ESG Investing Goes Mainstream
Anyone who viewed environmental, social, and governance (ESG) factor-based investing, impact investing, or other forms of socially responsible investing (SRI) as temporary trends on the fringe of the investment universe received plenty of evidence to the contrary in 2018. Institutional investors around the world—and the companies they invest in—increasingly view climate change, employee engagement, social development, and other non-financial forces as being critical drivers of long-term corporate performance. Roughly $12 trillion was invested in so-called sustainable, responsible, and impact strategies in the United States in 2018, according to US SIF, and that number is expected to grow in the years to come.
Despite its ongoing move toward the mainstream, there remains significant confusion about the various definitions and strategies that make up the broader SRI universe. This provides financial professionals with the opportunity to showcase their expertise in explaining these various approaches, as well as in connecting the dots between off-balance-sheet forces and a company’s risk/return profile.
5. Next Wave of Disruption
The last several years have brought waves of disruption to nearly every industry. From agriculture to food delivery and from auto manufacturing to car insurance, it’s hard to imagine an industry or supply chain that isn’t being reshaped by artificial intelligence (AI), machine learning, and other data mining capabilities.
While disruption is a theme that portfolio managers write about frequently in their fund commentaries, much of this analysis focuses on which industries are being the most affected by technological change now. This creates an opportunity for asset managers to show that they are thinking ahead of the curve by identifying which industries are most ripe for disruption 5-10 years down the road—and then explaining which technological or regulatory hurdles need to be overcome in the meantime.
6. The Future of Cryptocurrencies
At the start of 2018, bitcoin, blockchain technology, and the host of cryptocurrencies and other technologies they spawned were the dark horse darling of the alternative investment world. Bitcoin’s surge to $20,000 in December 2017 led many investors to speculate—in multiple senses of the word—that cryptocurrencies and the technologies behind them were poised to go mainstream with traditional institutional investors. Big banks started trading desks centered around the asset class. Exchanges started trading crypto futures. And retail investors flocked to startup brokerages and platforms that allowed them to buy bitcoin and other cryptocurrencies.
However, as 2018 wore on, skepticism about the serious long-term viability of cryptocurrencies and the threat of tightening regulatory oversight (including ongoing questions about custody issues for broker-dealers) soured the mood surrounding the asset class—and crushed its market value. As of this writing, bitcoin is trading at under $4,000, and the cryptocurrency industry has seen widespread layoffs. These events raise complex questions about whether cryptocurrencies are viable as an asset class—questions that asset managers should be prepared to answer.
7. Unwinding of Quantitative Easing
Since 2009, the United States Federal Reserve has purchased more than $3.5 trillion in government bonds and mortgage-backed securities—essentially flooding the economy with money—in an effort to first rescue the economy from collapse and prop up equity valuations. But now that the Federal Reserve has put Quantitative Easing (QE) in reverse and begun trimming its balance sheet, this transition raises fascinating and momentous questions about what it will mean for equity and fixed income valuations, as well as economic growth.
The question becomes even more complex when considering that other central banks around the world are at different stages of the monetary easing/tightening cycle. Given the unprecedented scale and nature of the monetary levers that have been applied to the global economy, questions abound about how economies and financial systems will react once those tools are unwound. Moreover, how will central banks approach using something like QE when faced with the next economic crisis?
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In my next blog post in this series, I'll provide marketers in the private wealth management industry with five white paper ideas they can use to ignite their content engines in 2019.