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In a time of crisis, investors flocked to the familiar

During the first two quarters of 2020, investors placed their faith and their dollars with large, diversified, and well-established firms. Although these high performers comprised a seemingly representative sample of 25 percent of all firms in the industry, 80 percent of the flows to this group went to just ten asset managers, generating $183 billion in net inflows.

Incumbency has benefits in a period of extreme volatility.

Incumbency has benefits in a period of extreme volatility.

Impact of COVID-19 crisis on asset-manager flows in 2020

Quarter Q2 net outflows Q2 net inflows
Q1 net inflows Mixed performers: Smaller focused firms, flows $6 billion and 11% of firms Consistent high performers: Large, diversified, consistent outperformance, flows $183 billion and 25% of firms
Q1 net outflows Challenged: Active equities, investment performance challenges, flows $290 billion and 45% of firms Rebounders: Midsize firms with performance in right asset class, flows $0 and 17% of firms

Source: Morningstar; McKinsey analysis

McKinsey & Company

To read the report, see “North American asset management: A year of shocks but few surprises,” December 14, 2020.