Aleks Sui, Regional vice-president, sales, Invesco

“I think the industry is looking for innovation. Just repackaging an old strategy with new bells and whistles is becoming a harder sell”

As ETFS have emerged as a lower-cost option for investors over the past decade, the mutual fund industry has suffered in comparison. As such, Aleks Sui of Invesco believes mutual funds are in need of a refresh to ensure they maintain a top spot in the future. “Mutual funds have been around since the 1930s in Canada, and the structure has not evolved much in the last 20 years,” he says. “I think the industry is looking for innovation. Just repackaging an old strategy with new bells and whistles is becoming a harder sell.”

Invesco is committed to active management, and its product lineup reflects that. At the same time, the firm clearly believes indexing has its place in a portfolio, too. “Much of Invesco’s focus has been toward high-conviction active management and intelligent indexing,” Sui says. “We believe these solutions help advisors manage for better client outcomes. We want to ensure we have the right active portfolio managers, as well as securing the right index providers, to match what advisors are looking for.”

Sui acknowledges that meeting the demands of advisors is more challenging than ever in 2017. “Advisors are asking us to customize ETF, mutual fund, PTF, SMA or OM strategies based on how they operate their practices,” he says. “Today there is as much discussion in client meetings about the quality of an investment strategy as about how that strategy is delivered.”

Given the bull market and the growth of passive, index-tracking ETFs, this hasn’t exactly been a golden era for active managers. The only inevitability of a bull market is that it will eventually end, and it’s in a downturn that active management really proves its worth.

“I believe that high-conviction active management will survive criticism and begin to flourish in the future,” he says. “I anticipate that ETF/PTF product structures will see continued growth as advisors shift more toward fee-based and discretionary business models. Simplicity and convenience will be key drivers to adopting the next generation of investment management structures.”