When asked about the top threats to the growth of Singapore’s asset management industry over the next 12 months, fund managers identified accelerated flows to passive solutions, further margin erosion, and shifting investor preferences as their key points.
The growing trend toward passive investing through ETFs and other index products represents a paradigm shift among Asian investors. Historically, they favored active investment strategies.
However, there is a growing recognition that active strategies are often not more successful than passive investments over the long term. Additionally, passive investments are significantly more cost-effective. This explains the observations made by fund managers in the 2025 edition of the IMAS Investment Managers’ Outlook Survey.
Other Concerns
Concerns about a fragmenting global order have risen to the forefront in the latest report: 56 percent of respondents expect an increase in geopolitical conflicts, forecasting a significant impact on the global economy and financial markets.
Meanwhile, 2024’s fears over persistent inflation have eased, with 52 percent of respondents confident that central banks will successfully achieve a «soft landing.» Additionally, 75 percent expect the US Fed to cut rates by up to 0.75 percentage points.
Navigating Challenges and Driving Sustainable Growth
Jenny Sofian, IMAS Chairwoman (Image: IMAS)
As the global economic environment becomes increasingly complex, the asset management industry must demonstrate resilience, agility, and foresight in navigating challenges and driving sustainable growth,» said Jenny Sofian, chairman of the Investment Management Association of Singapore (IMAS), at a media briefing on Wednesday in Singapore.
Respondents also anticipate sustained strong demand for innovative technological solutions to reduce costs and increase productivity. Advanced analytics, machine learning and artificial intelligence – including the use of Generative AI (GenAI) have been consistent as the top fintech areas of interest.
Functions Most Likely Disrupted by Technology
Within the investment management sector, Fund Operations, the Middle Office, and Research are identified as the main functions most likely disrupted by technology. By embracing tools like GenAI, firms are not only addressing disruption but actively reimagining these functions to unlock new levels of value.
«Companies address the ongoing threat to their margins by broadening their offering to new asset classes such as private markets as well as expanding into additional distribution channels. These trends reflect an industry in transformation, driven by a commitment to meet evolving client demands and capitalize on future growth opportunities,» said Thomas Kaegi, Chairman of the IMAS Development Committee.
- This year’s infographic reporting on the survey findings can be found here.
New Comprehensive Framework
Building on its commitment to supporting the asset management industry, IMAS is proud to announce the launch of the Model Discretionary Investment Management Agreement (IMA). This initiative, developed by the IMAS Legal Committee – comprising experienced representatives from leading legal firms and legal departments of fund managers – provides a comprehensive framework that sets out the key terms and conditions governing the relationship between clients and investment managers under a discretionary mandate.
It is designed to meet baseline regulatory requirements while incorporating explanatory notes and detailed provisions to facilitate its adoption. By introducing this Model IMA, IMAS seeks to enhance operational efficiency, promote best practices, and support the sustainable growth of the asset management sector in Singapore, particularly smaller fund management companies that face resource constraints.
- The IMA will be made accessible for IMAS members on the IMAS website here.
