Common shares of J.P. Morgan led those of the largest asset managers over the five-year period ended Dec. 31. Furthermore, J.P. Morgan stock was the only member of the cohort to outperform the broad large-cap equity market. Among the 18 largest publicly traded asset managers, only six had a positive annualized five-year return while the S&P Asset Management & Custodian Banks index fell slightly into the red.
The industry as a whole did not fare well over the period as competitive pressures to reduce fees cut into revenues as well as investor appetite for low-priced passive strategies. A million dollars invested in the S&P Asset Management & Custodian Banks index would have lagged the same amount in the S&P 500 index by $362,000.
This is not to say there wasn't growth in the industry. In the five years since the end of 2013, index powerhouses BlackRock and Vanguard Group grew their assets to nearly $6 trillion (up 38.2%) and $5 trillion (up 76.7%), respectively, while the more active-focused managers, like J.P. Morgan, grew at a more modest 3.8% clip.