As investors plot their next move in financial markets that continue to be characterised by volatility and uncertainty, many are looking for different types of strategies and new opportunities. Asset managers able to help them rise to this challenge will reap the benefits, but analysis from Dianomi suggests understanding what investors want is not always straightforward.
Online coverage of commodities is a good example. Dianomi’s data suggests this was the only asset class for which investors’ appetite for online coverage was relatively higher during September: its share of impressions registered for articles on leading asset classes was up 12%. Commodities articles also score more highly on Dianomi’s Engagement Index – measuring the number of impressions per unique user – than those covering any other asset.
However, asset managers seem reluctant to provide investors with content on commodities. Dianomi’s analysis of content published by 20 leading asset managers last month shows that the proportion of this content focused on commodities fell compared to August; by contrast, asset managers dedicated an increasing share of their content to articles on equities, fixed income and real estate.
In fact, there is good reason to expect investors to be taking a keen interest in the commodities market. We have already seen the price of gold – still regarded by many as the ultimate safe-haven asset – spike higher this year. And as the global economy begins to recover from the Covid-19 pandemic, optimism is rising about the prospects for a range of commodities. This recovery will depend on commodity-intensive infrastructure investment, many analysts suggest, with governments worldwide seeking to stimulate their economies by with a broad range of such projects, large small. China’s bounceback, for example, is being boosted in exactly this way.
In which case, investors’ appetite for commodities-related content makes perfect sense – and asset managers need to be providing this support. And to be fair, some managers clearly recognise this; significantly, Dianomi’s analysis shows that the sentiment of the commodity coverage that asset managers did publish last month was markedly more positive than their coverage of any other asset class.
Will we now see an increase in commodities content in the months ahead? Well, it’s interesting to note that in August, real estate was the asset class about which asset managers were most positive in their content; this was followed by a significant increase in the share of coverage they devoted to real estate during September. That experience may now be repeated with coverage of commodities.
More broadly, however, the challenge of identifying content that investors will want to consume remains demanding, particularly when the market landscape is changing so rapidly in the context of Covid-19.
Moreover, in recent weeks, asset managers appear to have become more anxious about the potential for Covid-19 to cause further disruption to financial markets and the global economy. Dianomi’s analysis shows that while the sentiment of asset managers’ articles covering Covid-19 changed markedly from May onwards – moving from being almost universally negative to broadly upbeat – September may have seen another shift. During much of last month, asset managers’ Covid-19 coverage was once again pessimistic.
This may reflect rising concern about the adverse impacts of a second wave of the pandemic, particularly in Europe, where case numbers have once again begun rising sharply. Further restrictions threaten additional economic damage – bad news for investors and for markets.
The change of tone underlines the difficulty asset managers now have in identifying the topics with which consumers of content will engage – and also in getting the tone of their coverage right. But anticipating investors’ appetite for particular types of content and support will be even more critical if volatility and uncertainty spike higher once again.