Gatch and Reynolds Will Stand By Active Through the Tough Times
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Monday, August 10, 2015

Gatch and Reynolds Will Stand By Active Through the Tough Times

Bob Reynolds and George Gatch are two of the mutual fund industry's biggest proponents of active management, and it sounds like that isn't changing anytime soon.

Putnam [profile] chief Reynolds just chatted with the Boston Business Journal, and J.P. Morgan Asset Management [profile] global funds management chief Gatch spoke with the Wall Street Journal. In both cases, the rise of passive investments came up, and both executives reiterated their focus on active, despite headwinds. [Both executives in the top 20 of MFWire's Influencer List]

"We're in a tough part of the cycle for active management, but this too will turn. That's why we've created 26 new products over the past six years," Reynolds told the Boston Business Journal. "We have a lot of confidence."

"In the last 10 years, passive has doubled its market share in U.S. mutual funds, [so] for active managers like J.P. Morgan Investment Management, the hurdle is higher in terms of what we have to deliver, and we're exclusively focused on that," Gatch told the WSJ. "We have to provide value to compete with the passive alternatives."

Gatch also offered a hint as to what he's focused on at JPMAM. He described the firm's biggest challenge as expanding its retail (both direct and advisor-sold) distribution.

"I think in the grand scheme of things, our primary emphasis had been working with big institutions," Gatch told the pub. "It's only been in the past decade that we began to transition our capabilities to our mutual-fund investors — we're playing a little bit of catch-up."

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