This article is about how rising US institutional demand for passive equity strategies is forcing active managers onto the defensive. Bruce Frumerman is quoted addressing how active managers can adjust their sales pitches.
“There’s still potential opportunity to attract the interest of investors who are making their core equity allocation to a passive strategy,” says Bruce Frumerman, president of Frumerman & Nemeth, a New York communications and sales marketing consultancy.
“You have an opportunity to be a part of the total portfolio by playing a specific role, possibly by being the product they choose for seeking to achieve higher returns or to have a different risk/return profile to that of the investor’s core passive allocation,” he says.
Mr Frumerman encourages his clients to “communicate about place” – in addition to addressing the usual topics of performance, portfolio holdings and people – in order to shape investors’ perceptions about the function a product could play within a portfolio. “The role that you play may be different from one investor to the other,” he says.
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