With increasing investor appetite for low-cost funds, the low-expense ratio environment may be here to stay with active management finding a home inside the exchange-traded fund (ETF) wrapper.
Expanding the product lineup into alternative investment offerings such as private credit and evergreen or hybrid fund structures, as well as investing in technologies that integrate artificial intelligence (AI) into sales and distribution processes may be among some of the most successful revenue-enhancing strategies. In 2024, AI technologies promised to be one of the most disruptive forces in the investment management sector. Now, it seems that promise has likely surpassed expectations. While the opportunity buzz is growing, many organizations may be left to determine how to effectively harness AI solutions at scale without prior models to guide them.