US Institutional Equity Trading Study 2017: In the Eye of the Storm is an interview-based study of 95 head and senior traders of American equity asset managers and hedge funds. More than 95 per cent of US equity funds have been impacted from the move from actively managed funds to more passive strategies, yet few have a strategy to combat it.
Most US active managers at least know they will be impacted in some way by MiFID 2 unbundling rules, as 76 per cent expect an effect, up from 66 per cent one year ago.
“Virtually all larger funds will need to restructure the way they procure research,” TABB Group analyst and co-author Valerie Bogard said. “Larger funds are more impacted and more prepared than smaller funds. Many smaller funds have not even started analyzing the impact of unbundling on their business.
“The combination of the move toward passive investing, unbundling, and low volatility has the US equity institutional investor commission pool down 7.5% from 2015.”