Moody's on Dec. 14 revised its outlook on global asset managers to stable from negative, based on the industry's response to challenges and rising demand.
The emergence of new products that fuse active and passive management features is a key driver of the outlook change, the rating agency said.
Challenges include new rules under the Markets in Financial Instruments Directive, or MiFID II, which comes into force in January 2018 and require greater transparency; and competition spurred by cheaper passive products is driving fees lower.
Asset managers have responded by launching new products including multi-asset portfolios and "smart beta." Further, asset managers are employing technology to capture the growth of "roboadvice" and to more closely partner with distributors.