‘Nowhere to go but up’ seems to be the 3Q22 mantra. Even as overall AUM dipped slightly, the twin factors of four-year-low benchmark valuations and MMF yield compression conspired to turn investors to selective equity allocations. Not quite risk on, but a welcome outcome for certain managers.

There are changes to industry sub-structure that portend competitive realignment next year. Deep changes in household savings and the meaningful expansion of tax-incentivized commercial pensions across multiple large cities hold significant potential for new flows. The industry has shown an ability to navigate uncertainty on the downside this year; positioning for upside uncertainty will likely be the challenge for 2023.

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