UCITS and AIFMD 2025: The great moderation is over, industry says
16 May 2025 Dublin
Image: Bartkowski/stock.adobe.com
How has the evolving macroeconomic and geopolitical environment impacted existing investments and new fund launches?
The question, poised at a panel of industry experts at the UCITS and AIFMD 2025 conference in Dublin, aimed to address and explain the current market conditions, as well as the drive behind investor decision-making.
“The dynamics of the bond market have definitely shifted,” noted one panellist, who believes too much focus has been placed on the current Trump administration and resulting tariff policies, for creating market instability. Rather, they cite the onset of Brexit and the initial Trump presidency as a few of the catalysts to a decade-long period of political and economic volatility. As they suggested, “this is a process that really started in 2016 with the end of neoliberalism”.
This was a common sentiment among the panellists. Having seen how central banks now fight to combat inflation rather than deflation, a collective thought was shared: “the era of the great moderation is over.”
Shifting the conversation to passive and active asset allocation, the moderator questioned whether turbulence in the industry has led to a change in preference for managers and investors. “Passive has been overlooked for the past five years,” one panellist said, “and it has become more difficult to find active asset managers now; it is more of a risk.”
Although boutiques in the industry remain likely to offer a range of active and passive services, larger firms appear to be stepping back from active allocation, where another panelist agreed, “it has fallen out of favour as a result of the bond market uncertainty.”
Risk and uncertainty were prominent themes throughout the panel discussion, where the industry believes it to be a key driver behind investor choices. As one panellist concluded, “central banks are never going to step back in again in the same fashion, we need to have more prudence in our portfolios as a result.”
The question, poised at a panel of industry experts at the UCITS and AIFMD 2025 conference in Dublin, aimed to address and explain the current market conditions, as well as the drive behind investor decision-making.
“The dynamics of the bond market have definitely shifted,” noted one panellist, who believes too much focus has been placed on the current Trump administration and resulting tariff policies, for creating market instability. Rather, they cite the onset of Brexit and the initial Trump presidency as a few of the catalysts to a decade-long period of political and economic volatility. As they suggested, “this is a process that really started in 2016 with the end of neoliberalism”.
This was a common sentiment among the panellists. Having seen how central banks now fight to combat inflation rather than deflation, a collective thought was shared: “the era of the great moderation is over.”
Shifting the conversation to passive and active asset allocation, the moderator questioned whether turbulence in the industry has led to a change in preference for managers and investors. “Passive has been overlooked for the past five years,” one panellist said, “and it has become more difficult to find active asset managers now; it is more of a risk.”
Although boutiques in the industry remain likely to offer a range of active and passive services, larger firms appear to be stepping back from active allocation, where another panelist agreed, “it has fallen out of favour as a result of the bond market uncertainty.”
Risk and uncertainty were prominent themes throughout the panel discussion, where the industry believes it to be a key driver behind investor choices. As one panellist concluded, “central banks are never going to step back in again in the same fashion, we need to have more prudence in our portfolios as a result.”
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