Asset management barbell getting heavier
| Sep 9th, 2008 | Filed under: Institutional Investing, Today's Post | By: Alpha Male |
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Barbells have been around a long time. According to historian Jan Todd, a Boston area strong man named George Barker Windship was the first to patent the now ubiquitous variable-weight barbells found in most gyms. That was 1865. But the first use of the term “barbell” was in an obscure 1870 British book called “Madame Brennar’s Gymnastics for Ladies, A Treatise on the Science and Art of Calisthenics and Gymnastic Exercises.”
Today, the term “barbell” is routinely applied to anything that maintains its balance even though its bulk is distributed mainly at two ends. Take, for example, the asset management industry. As the Financial Times reports this week:
“Things are looking good for the asset management barbell thesis Morgan Stanley (AMEX:MWD) first put forward five years ago. This suggested traditional asset managers would lose out as money increasingly shifted to cheap passive strategies on the one hand and alternative investments and high return specialists on the other.”
As we’ve reported extensively on these pages, the big winners in the asset management industry have been alternative investments and ETFs – both of which represent the constituent elements of any traditional active fund – the variable weights at each end of the proverbial barbell. The Morgan Stanley report covers the European asset management industry and clearly illustrates this trend.
The chart below from the report shows that passive (ETFs) and high-alpha (short-extensions, funds of hedge funds etc.) are growing the fastest.
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