Should you buy shares in Schroders, Abrdn and Liontrust?

The landscape for British asset managers has become increasingly challenging as they find themselves squeezed between larger American firms and specialized funds. Unlike giants such as BlackRock, which can offer a wide range of passive funds at lower fees due to their scale, British firms lack the same level of resources and market presence. This disparity has made it difficult for them to attract significant investment, leading to a decline in their stock performance. In addition to the competitive pressure from larger firms, British asset managers also face difficulties in justifying their fees. They do not possess the depth of niche expertise that allows specialized funds to command higher costs. This lack of differentiation has further contributed to the negative sentiment surrounding their stocks. The situation is exacerbated by a broader trend where big investors are showing less interest in British shares compared to previous years. This shift in investor sentiment has resulted in a significant drop in the market value of firms like Schroders, which has seen a negative total return of 16 percent over the past five years. Overall, the combination of competitive disadvantages, fee justification challenges, and waning investor interest has led to a bleak outlook for British asset managers, with their shares trading at historically low levels.