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Capital Markets

Mercer flags more pain for mutual fund managers

Lower fees heighten lure of passive investing

Active fund managers who invest in listed securities are finding it harder to gain an edge.   © Reuters

SINGAPORE (Nikkei Markets) -- Traditional fund managers will face further pressure on fees as investors continue to park more money with exchange-traded funds as well as with those who specialize in unlisted assets, according to the world's largest adviser to pension funds.

Rich Nuzum, the president of Mercer's global wealth business, described the market for investments as "bifurcated" with institutional investors seeking higher returns through private equity and other alternative strategies while keeping a lid on the costs associated with standard investments such as stocks and bonds.

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