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Retail investors have helped fuel the growth in the Middle East’s assets under management (AUM) industry, which recorded a double-digit increase in 2021, according to a new report by Boston Consulting Group (BCG).
Last year, retail investors outpaced institutions as a source of capital, accounting for nine percent of total AUM in the region. Net flows from institutional investors recorded a three percent decline during the same period.
“Retail investors have become one of the most important investor segments, outpacing institutional AUM,” BCG said.
The region’s AUM jumped 16 percent to $1.2 trillion last year, significantly above the 10-year growth average. Global AUM reached $112 trillion during the same period, up by12 percent, which is well above the 7 percent average of the previous two decades.
This year, Middle East exchanges have already shown a strong performance, and this indicates that those investing in the region are likely to fare better than those who chose to invest into global markets, BCG noted.
The growth in net flows from the retail segment has been due to better and more convenient access to investment options.
“Asset managers have been able to tap deeper into the retail segment as technology has made it economically feasible to serve clients of all sizes,” said Markus Massi, Managing Director & Senior Partner at BCG.
He said many large brokerage companies are utilising digital platforms and “robo-advisors” to “democratise” investor access to increasingly sophisticated options.
“Retail clients now receive data-driven personalisation advice, fractional shares and streamlined interfaces that charge low fees or no fee at all,” Massi said.
(Writing by Cleofe Maceda; editing by Seban Scaria)
