The Threat of Amazon, Big Tech Disrupting Active Fund Management

The video discusses Amazon's potential entry into the mutual fund market, leveraging its vast customer base and digital ecosystem. Rory Callagy from Moody's highlights Amazon's strategy to start as a distributor before possibly moving into manufacturing. The discussion compares Amazon's potential impact on the industry to Vanguard's dominance. Moody's provides insights into the current market trends, noting the shift from active to passive funds and the stable outlook for asset management credit ratings. The video also explores consolidation opportunities in the asset management industry, particularly in smart beta and specialized ETFs.

What advantage does Amazon have in entering the mutual fund market?

• Its experience in manufacturing

• Its vast customer base and online presence

• Its expertise in active fund management

• Its regulatory influence

How might Amazon initially enter the asset management industry?

• As a direct competitor to Vanguard

• By manufacturing its own funds

• As a distributor partnering with asset managers

• By acquiring existing mutual funds

What is a key factor in Amazon potentially disrupting Vanguard?

• Offering higher returns

• Acquiring Vanguard

• Direct customer relationships and user interface

• Lowering fees significantly

What trend is significantly impacting the asset management industry?

• Decline in passive investing

• Increase in active fund management

• Rise of passive investing

• Stability in mutual fund outflows

What is Moody's outlook for asset management credit ratings in 2019?

• Negative

• Stable

• Positive

• Uncertain

Why might buying an ETF issuer not benefit a traditional asset manager?

• High competition in market CAP index ETFs

• Regulatory challenges

• Lack of demand for ETFs

• High fees associated with ETFs

Where does Moody's see opportunity in the ETF market?

• Market CAP index ETFs

• Smart beta and specialized ETFs

• Traditional mutual funds

• Government bonds