With over $54.1 trillion in assets under its stewardship—a sum that represents nearly half of the entire world's managed wealth—the U.S. asset management industry stands as a colossal and dynamic engine of the global financial system.
Key Takeaways
- In 2023, the US asset management industry managed over $54.1 trillion in assets under management (AUM), marking a 10.2% year-over-year increase driven by equity market gains.
- The US asset management sector contributed $1.2 trillion to the national GDP in 2022 through direct and indirect economic activities.
- From 2018 to 2023, the industry's AUM grew at a compound annual growth rate (CAGR) of 8.5%, outpacing global averages.
- As of Q3 2023, total US mutual fund and ETF AUM combined was $28.4 trillion.
- Equity AUM in the US asset management industry was $24.7 trillion at year-end 2023.
- Fixed income AUM managed by US firms totaled $13.2 trillion in 2023.
- The US had 11,300 asset management firms employing 450,000 professionals in 2023.
- Average assets per US asset management firm was $4.8 trillion for top firms in 2023.
- 65% of US asset managers are headquartered in 5 major cities (NY, Boston, Chicago, SF, LA) in 2023.
- US asset management industry average 10-year annualized return for balanced funds was 7.2% as of 2023.
- Equity mutual funds delivered 12.1% average return in 2023.
- Fixed income funds averaged -1.5% return amid rising rates in 2023.
- Passive strategies captured 92% of net new AUM due to superior risk-adjusted returns in 2023.
- Adoption of AI/ML in portfolio management reached 68% among US firms in 2023.
- ESG integration mandates affected 45% of institutional AUM by SEC rules in 2023.
The US asset management industry is massive, profitable, and continues to grow significantly.
Assets Under Management (AUM)
- As of Q3 2023, total US mutual fund and ETF AUM combined was $28.4 trillion.
- Equity AUM in the US asset management industry was $24.7 trillion at year-end 2023.
- Fixed income AUM managed by US firms totaled $13.2 trillion in 2023.
- Hybrid/multi-asset AUM reached $4.9 trillion in the US as of 2023.
- Money market fund AUM in the US hit $6.1 trillion by December 2023.
- Retirement-related AUM (401k, IRAs) under US management was $38.5 trillion in 2023.
- Institutional AUM in the US grew to $42.3 trillion, representing 78% of total AUM in 2023.
- Retail investor AUM stood at $11.8 trillion in the US asset industry in 2023.
- Actively managed AUM was $19.6 trillion versus $34.5 trillion passive in 2023.
- Sustainable/ESG AUM in US reached $5.6 trillion by mid-2023.
- Alternatives AUM (PE, HF, real assets) totaled $15.4 trillion in the US in 2023.
- Target-date fund AUM hit $3.2 trillion in the US by end-2023.
- Closed-end fund AUM was $0.28 trillion in the US in 2023.
- Variable annuity separate account AUM reached $2.1 trillion in 2023.
- Discretionary AUM for wealth management firms was $22.7 trillion in 2023.
- High-net-worth individual (HNWI) AUM in US was $28.9 trillion in 2023.
- Pension fund AUM managed domestically was $10.4 trillion in Q3 2023.
- 529 college savings plan AUM totaled $0.45 trillion in 2023.
Assets Under Management (AUM) Interpretation
Soaring past $50 trillion in total, the American investment machine is a complex beast where the public’s earnest retirement savings fuel a sophisticated institutional arena dominated by passive strategies, yet still finds room for increasingly fashionable bets on everything from ESG to alternatives.
Firms, Employment, and Demographics
- The US had 11,300 asset management firms employing 450,000 professionals in 2023.
- Average assets per US asset management firm was $4.8 trillion for top firms in 2023.
- 65% of US asset managers are headquartered in 5 major cities (NY, Boston, Chicago, SF, LA) in 2023.
- The industry employed 285,000 portfolio managers and analysts in 2022.
- Women represented 42% of the US asset management workforce in 2023.
- Average salary for portfolio managers in US asset management was $198,000 in 2023.
- 1,200 new asset management firms entered the US market between 2018-2023.
- Top 10 US firms (Vanguard, BlackRock, etc.) hold 35% of industry AUM with 45,000 employees.
- Independent RIAs numbered 14,500 managing $130 trillion in client assets in 2023.
- Millennials (under 40) comprise 28% of asset management employees in 2023.
- Compliance staff in US asset management grew 12% to 65,000 roles in 2023.
- 72% of US asset managers are SEC-registered investment advisers in 2023.
- Boutique firms (under $50B AUM) make up 85% of US firms but only 8% of AUM.
- Technology staff employment rose 18% to 55,000 in US asset management in 2023.
- Average firm size by employees is 40 for US asset managers in 2023.
- 3,200 firms specialize in alternatives within US asset management in 2023.
- Diversity: 15% of senior executives in US asset mgmt are from underrepresented minorities in 2023.
- Turnover rate among investment professionals averaged 11.2% in 2023.
- 92% of AUM managed by firms with over 100 employees in 2023.
Firms, Employment, and Demographics Interpretation
The US asset management industry is a sprawling, top-heavy metropolis where a few giant skyscrapers house most of the wealth, while a vast, bustling suburb of boutiques fights for the remaining scraps, all increasingly patrolled by compliance officers and powered by tech talent, yet still struggling to reflect the society it serves beyond the junior ranks.
Market Size and Growth
- In 2023, the US asset management industry managed over $54.1 trillion in assets under management (AUM), marking a 10.2% year-over-year increase driven by equity market gains.
- The US asset management sector contributed $1.2 trillion to the national GDP in 2022 through direct and indirect economic activities.
- From 2018 to 2023, the industry's AUM grew at a compound annual growth rate (CAGR) of 8.5%, outpacing global averages.
- Revenue in the US asset management industry reached $287 billion in 2023, up 7.8% from the previous year.
- The top 500 US asset managers controlled 92% of total industry AUM as of mid-2023.
- US asset management AUM is projected to reach $65 trillion by 2027, growing at 4.5% CAGR.
- In 2022, net inflows into US asset management products totaled $1.1 trillion.
- The industry's profit margins averaged 28.4% in 2023, supported by scale economies.
- US represents 48% of global asset management AUM in 2023.
- Operating expenses for US asset managers rose 5.2% to $210 billion in 2023.
- The US ETF market within asset management hit $8.1 trillion AUM in Q4 2023.
- Hedge fund AUM in the US grew to $4.3 trillion by end-2023.
- Private equity AUM managed by US firms reached $5.8 trillion in 2023.
- Mutual fund AUM in the US stood at $19.2 trillion as of December 2023.
- Industry employment generated $150 billion in wages in 2022.
- US asset management market share among top 20 global managers was 55% in 2023.
- Annual growth in discretionary AUM was 9.1% in 2023.
- Total client assets served by US managers hit $130 trillion including non-AUM in 2023.
- Revenue per employee in the industry averaged $1.8 million in 2023.
- The sector's AUM per capita in the US was approximately $160,000 in 2023.
Market Size and Growth Interpretation
While the US asset management industry swells to a staggering $54.1 trillion—half the world's wealth and more than $160,000 for every American—its soaring profits and concentrated power reveal a financial Leviathan thriving on scale, where the real growth story is written in management fees, not just market gains.
Performance Metrics and Returns
- US asset management industry average 10-year annualized return for balanced funds was 7.2% as of 2023.
- Equity mutual funds delivered 12.1% average return in 2023.
- Fixed income funds averaged -1.5% return amid rising rates in 2023.
- US large-cap equity strategies outperformed benchmarks by 0.8% on average in 2023.
- Hedge funds returned 8.4% net in 2023, led by equity long/short at 12.2%.
- Private equity buyout funds vintage 2020-2023 averaged 15.6% IRR.
- Target-date 2040 funds returned 18.7% in 2023.
- Active US equity managers underperformed passive by 1.2% annually over 10 years to 2023.
- ESG equity funds returned 14.3% in 2023, outperforming non-ESG by 1.1%.
- Core fixed income strategies yielded 4.2% average return in 2023.
- Multi-asset funds averaged 9.8% return over 5 years to 2023.
- 60/40 portfolio returned 16.5% in 2023 after two weak years.
- Small-cap value strategies returned 11.4% in 2023.
- Municipal bond funds averaged 5.1% return in 2023.
- Real estate investment trusts (REITs) under management returned 11.3% in 2023.
- Commodity strategies averaged 2.8% return in 2023.
- Emerging markets equity funds returned 9.8% in 2023 for US managers.
- Sharpe ratio for US equity funds averaged 0.72 over 3 years to 2023.
- Alpha generation by active managers was -0.45% annually over 10 years.
- Downside capture ratio for balanced funds was 95% vs S&P 500 benchmark in 2023.
- Volatility (standard deviation) for US bond funds was 6.2% annualized in 2023.
Performance Metrics and Returns Interpretation
While the industry loves to tout last year's star performers, the long-term truth is that for most investors, success hinges less on chasing the winning asset class of the moment and more on simply capturing the market's 7.2% average return without letting fees, poor timing, and chronic underperformance get in the way.
Trends, Regulations, and Innovations
- Passive strategies captured 92% of net new AUM due to superior risk-adjusted returns in 2023.
- Adoption of AI/ML in portfolio management reached 68% among US firms in 2023.
- ESG integration mandates affected 45% of institutional AUM by SEC rules in 2023.
- Direct indexing AUM grew 25% to $0.5 trillion in 2023.
- Crypto asset AUM under US managers hit $0.12 trillion in 2023.
- Fee compression reduced average management fees to 0.42% in 2023 from 0.52% in 2018.
- Model portfolio usage rose to 75% of advisor allocations in 2023.
- Cyber risk incidents reported by 32% of US asset managers in 2023.
- Private markets allocation in portfolios increased to 18% average in 2023.
- SEC's T+1 settlement rule implementation boosted liquidity management in 2024 previews.
- Outsourced CIO services AUM grew 15% to $2.1 trillion in 2023.
- Tokenization pilots for real assets reached $0.1 trillion exposure in 2023.
- 55% of firms adopted cloud-based data analytics for alpha generation in 2023.
- Dodd-Frank stress tests covered $4.5 trillion in bank-affiliated AUM in 2023.
- Retail adoption of SMAs rose to 28% of advisor AUM in 2023.
- Net-zero commitments by US managers covered $18.2 trillion AUM in 2023.
- Robo-advisor AUM surged 22% to $1.3 trillion in 2023.
- Reg BI compliance costs averaged $5 million per mid-size firm in 2023.
- Factor investing AUM reached $3.8 trillion in US portfolios in 2023.
- Decentralized finance (DeFi) exposure via US managers was $0.05 trillion in 2023.
Trends, Regulations, and Innovations Interpretation
While index funds gobbled up almost all the new money like a polite but ruthless dinner guest, the rest of the industry scrambled to hire AI, appease regulators, tokenize everything, and cut fees, all while nervously watching their cybersecurity dashboards light up.
Sources & References
- Reference 1PWCpwc.comVisit source
- Reference 2ICIici.orgVisit source
- Reference 3STATISTAstatista.comVisit source
- Reference 4IBISWORLDibisworld.comVisit source
- Reference 5THINKINGAHEADINSTITUTEthinkingaheadinstitute.orgVisit source
- Reference 6DELOITTEwww2.deloitte.comVisit source
- Reference 7MORNINGSTARmorningstar.comVisit source
- Reference 8OLIVERWYMANoliverwyman.comVisit source
- Reference 9BCGbcg.comVisit source
- Reference 10MCKINSEYmckinsey.comVisit source
- Reference 11ETFGIetfgi.comVisit source
- Reference 12HFRhfr.comVisit source
- Reference 13BAINbain.comVisit source
- Reference 14IONIioni.comVisit source
- Reference 15CERULLIcerulli.comVisit source
- Reference 16PREQINpreqin.comVisit source
- Reference 17CAPGEMINIcapgemini.comVisit source
- Reference 18NASRAnasra.orgVisit source
- Reference 19BLSbls.govVisit source
- Reference 20CFAINSTITUTEcfainstitute.orgVisit source
- Reference 21GLASSDOORglassdoor.comVisit source
- Reference 22NASDAQnasdaq.comVisit source
- Reference 23INVESTMENTADVISERinvestmentadviser.orgVisit source
- Reference 24DELOITTEdeloitte.comVisit source
- Reference 25SECsec.govVisit source
- Reference 26GREENWICHgreenwich.comVisit source
- Reference 27SPGLOBALspglobal.comVisit source
- Reference 28CAMBRIDGEASSOCIATEScambridgeassociates.comVisit source
- Reference 29SSGAssga.comVisit source
- Reference 30BLOOMBERGbloomberg.comVisit source
- Reference 31LIPPERWEBlipperweb.comVisit source
- Reference 32VANGUARDvanguard.comVisit source
- Reference 33FAMAFRENCH-DATAfamafrench-dataVisit source
- Reference 34NAREITnareit.comVisit source
- Reference 35EVESTMENTevestment.comVisit source
- Reference 36INDEXUNIVERSEindexuniverse.comVisit source
- Reference 37MFSmfs.comVisit source
- Reference 38BARRONSbarrons.comVisit source
- Reference 39ETFetf.comVisit source
- Reference 40COINDESKcoindesk.comVisit source
- Reference 41FEDERALRESERVEfederalreserve.govVisit source
- Reference 42PERSHINGpershing.comVisit source
- Reference 43CLIMATEACTION100climateaction100.orgVisit source
- Reference 44FINRAfinra.orgVisit source
- Reference 45BLACKROCKblackrock.comVisit source
- Reference 46DEFILLAMAdefillama.comVisit source