ZURICH, Oct 21 (Reuters) - Profitability at asset

managers has slipped for the past two years and is likely to

decline further through 2028 as investors increasingly opt for

products with lower fees, such as exchange-traded funds (ETFs),

according to a new study.

The study of 40 global asset managers including BlackRock ( BLK ),

State Street, JPMorgan ( JPM ) and Goldman Sachs ( GS ) by German financial

strategy advisor zeb Consulting showed their profits in 2023

slipped to 8.2 basis points (0.082%) of assets under management

from 10.1 basis points in 2021 and 9.4 points in 2022.

"The good years are over for now," zeb senior consultant

Fränk Hamelius, one of the study's authors, said on Monday.

Over the past five years, the assets under management of the

firms studied have risen by 8.8% annually on average, but their

operating profits have only gone up by 0.7% per annum, it said.

Under the baseline scenario forecast by the study, profits

would likely slip to 5.5 basis points of assets under management

by 2028 and could fall to as little as 3.9 points. In the best

case, they could increase to 9.1 basis points, it predicted.

With interest rates having risen in the last few years,

investors moved money from equity funds into bond funds,

yielding lower profits for asset managers, the study said.

Medium-sized asset managers are on average significantly

less profitable than large and small ones, it showed.

Firms with assets under management of between 370 billion

euros and 1.5 trillion euros are often too small to offer

products such as ETFs, but also too big to offer high-yield

niche funds, Hamelius said.

That is putting pressure on firms to grow through mergers,

and accelerating industry consolidation, he said.