The Future of Asset Management

A trends report
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Executive Summary

The Future of Asset Management

For asset owners and managers alike, ongoing digital transformation, revenue pressures and a complex macro and geopolitical picture have forced reappraisals of both their strategies and their operating models—to find new efficiencies, explore new partnerships, and strike a delicate balance: between maintaining resiliency in the face of change, and driving innovation at scale to capitalize on opportunity.

BNY Mellon’s The Future of Asset Management: A Trends Report represents a deep dive into the sea of evolving concerns and goals most top-of-mind for over 200 of today’s industry leaders.

Not surprisingly, resiliency and scalability sit atop the list as guiding stars for both asset managers and owners. To find success with these twin priorities, an increasing reliance on service partners and outsourcing is a noted ongoing change to traditional operating models.

Digital transformation remains a clear imperative, with clear benefits: Streamlined trading. Unified data. Seamless integration of acquisitions. Enhanced client experiences. Support for remote work. But building out these capabilities takes time, and comes at a price. The solution? Across front, middle and back office functions, asset managers and owners are looking outside their own walls for the support and capabilities they need, at a manageable cost: tapping fintech disruptors for their innovations and expertise, outsourcing data activities and reporting, and fostering deeper strategic alignment with existing service partners.

illustration
85%

increasing reliance on core financial service providers and/or streamlining with few best-of-suite vendors and providers.

Against a dynamic backdrop, product and asset allocation strategies have shifted accordingly, with several trends taking center stage:

  • Increasing complexity—in data, reporting, and regulatory requirements— have put renewed focus on customized solutions, with over half of respondents noting plans to increase exposure there in the next 1-2 years.
  • Values-aligned investment has continued its strong run – 87% of respondents anticipate their organizations increasing ESG strategies .
  • ETFs have continued to gain ground, with almost half of managers surveyed expecting to see an uptick in mutual fund conversions to ETF structures.
  • A continued push-and-pull between passive and active approaches, with 44% of asset managers expecting to increase offerings of active/smart beta ETFs , while 60% of owners forecast increased allocations to passive strategies .

In contrast to that oppositional strategic interplay, one place where consensus reigns is the near-universal regard for the sizeable opportunity in D2C distribution.

With the prospect of optimized digital solutions to better engage with “mass affluent” and HNW individuals, asset managers are keen to level up this capability. But in the short term, traditional intermediaries will continue powering growth here—along with service providers, from whom asset managers increasingly (54%) expect to receive help both with distribution channels, and a range of advisory services.

As the industry continues to adapt and innovate to serve its stakeholders, it’s clear service providers will need to meet that change—with increased efficiencies, expanded services, and new technologies—to deliver the value partners rely on to realize their ambitions.

Methodology

Mergermarket, in partnership with BNY Mellon, surveyed 106 asset managers and 94 asset owners from around the world to gain insights into key trends in the asset management industry

Half of all respondents were based in North America, 40% in Europe, the Middle East & Africa (EMEA), and 10% in Asia-Pacific (APAC).

50
North America
40
Europe, Middle East & Africa EMEA
10
Asia-Pacific

Asset manager respondents represented organizations with varying levels of assets under management (AUM), from at least US$1bn to upwards of US$500bn. These respondents included large-scale, diversified asset managers (44%), private equity (PE) firms (22%), infrastructure/real estate asset managers (16%), hedge funds (9%), and direct lenders (also 9%).

  • Asset managers
  • Private Equity Firms
  • Infrastructure/Real Estate asset managers
  • Hedge funds
  • Direct lenders

Among asset owners, respondents represented organizations with at least US$10bn AUM, to upwards of US$500bn. These respondents included pension funds/trustees (49%), insurance companies (30%), endowments/foundations (13%), sovereign wealth funds (5%), and central banks (3%).

  • Pension funds/trustees
  • Insurance companies
  • Endowments/foundations
  • Sovereign wealth funds
  • Central banks

01
Data and Technology

Data still dominates

Reliance on data and analytics was identified as the top trend in asset management over the next 3-5 years by both asset managers and asset owners. They feel the pressure to seize opportunities being created by big data and the technology that can be used to analyze it, including cloud computing, artificial intelligence (AI) and machine learning.

For some, this focus on data may involve internal changes, while others seek outside support. Integrating data sources and improving transparency was cited by asset managers as a top priority over the next 24 months. But increased complexity of both data and its application are challenges. When asked what hindered their ability to extract meaningful insights from their data, there was little consensus. Instead, it appears a range of barriers exist.

New technologies – from machine learning to blockchain – may help, identified as another top trend in the survey. Greater and more expansive use of tech-related tools was high on the list of spending and development priorities for both asset managers and owners. Greater emphasis on digital tools was also linked to areas respondents are considering for outsourcing opportunities.

Finding in-house solutions is not off the table, though respondent groups differed in their approaches. Asset managers are looking to hire more specialist staff and increase spending on digital plans. Alternatively, asset owners are exploring partnerships – from co-creating new products to increasing reliance on their existing financial service providers.

Both groups are eyeing advancements in artificial intelligence (AI) as a potential solution for a variety of needs. For example, when asked what capability or technology they plan to develop over the next three years, 45% of respondents said AI and predictive analytics (20% and 25%, respectively). In fact, 67% of asset managers surveyed said they were already using machine learning/AI to drive change in their business.

At the same time, these trends pose a disruptive threat to asset managers wedded to older operating models as scalable and robust solutions are expensive, complex, require new technology and demand cultural change to implement.

Data-driven insights, swifter decision making and improved risk management potential are some of the benefits of using data and analytics across asset management functions. These benefits will increase the reliance of data and management.
It’s essential to accelerate the analytics and data processing technologies. We cannot work with older technology because it makes us less competitive.

Adapting the Front Office with Data Management, AI and Integration

For the front office, asset managers are looking to harness technology across the gamut of functions: including the full suite of analytics to portfolio management teams, providing insights around performance and risk attribution, deepening research and analyzing trends.

Most asset manager and asset owner respondents intend to employ AI and predictive analytics over the next three years, in addition to technologies such as cloud computing that can support the increased computing power necessary for adequate data storage and processing.

The main challenge with the application of advanced analytics, however, is an ability to integrate data from an increasingly rich set of sources in a way that will adapt to the front office.

Since there are multiple data sources, we have to ensure that data management is conducted securely and also favorably for different departments.

In which parts of your organization are you looking to expand the deployment of data analytics and insights and digital capabilities/technologies?

    Front-Office Risk Management
    72
    Portfolio Management
    68
    Research
    66
    Corporate Functions
    66
    Unlock back-office operational efficiencies
    59
0
100

Percentage of asset managers and asset owners planning to develop capabilities in AI (56%), predictive analytics (51%) and cloud computing (41%) over the next three years.

    AI
    56
    Predictive analytics
    51
    Cloud computing
    41
0
100

How do you anticipate your priorities shifting over the next 1-2 years?

Asset managers and asset owners recognize they cannot continue making incremental improvements confined to silos in their organizations. The volume, velocity and complexity of harnessing data is difficult to manage at scale, from the delivery of actionable insights to ensuring data flows cleanly and seamlessly through the back, middle and front office. Accordingly, 37% of asset managers identified integration of data sources and increasing visibility end-to-end as a top three priority over the next 1-2 years.

A more holistic approach to analyzing, using and integrating data with new technology that spans the entire business is necessary and many firms are turning to service providers for full support. Similar proportions of respondents have plans to outsource or explore the outsourcing of data management infrastructure (26%) and data operations and/or analytics (29%). However, more than half of respondents (53%) already outsource both functions to some extent.

Implementation and Integration Challenges for Scalable Technology

The barriers facing asset managers and owners as they work to effectively manage their data are vast.



  • Some 80% of asset owners agreed their biggest barrier to effective data management was the ability to obtain real-time, high-quality data that is reliable, complete and fresh.
  • Alternatively, there was little consensus in asset manager responses. Though 37% of managers said integrating data sources and increasing visibility would likely be a top three priority over the next few years. When asked to single out their top priority, data ranked first – alongside introducing operating model changes. Overall, the challenges in data management appear to be scattered across the range of options, from technology limitations to incorporation of external data.

Similarly, managers do not face a single barrier in extracting meaningful insights from data. Perhaps the most uniform culprit was thought to be data complexity, with 24% of those surveyed choosing it as the top barrier, closely followed by 23% selecting the inability to capture certain types of data or the lack of proper analytical tools.

The growing number of data sources and wider range of data types under analysis can complicate the generation of meaningful insights. Both asset managers and asset owners cite the complexity of data and the difficulties of working with unstructured data as major obstacles.

Companies based in North America seem the most interested in data management. When asked about strategic imperatives, 20% of North American respondents said creating a data management and governance model to support growth. This compares to 10% of those based in the EMEA regions and 0% of Asia Pacific survey participants.

Yet all three regions placed providing a better client experience and more transparency to stakeholders as a top three consideration over the coming year. Here, 40% of respondents in Asia Pacific placed a higher importance on transparency versus 32% in North America and 31% in EMEA.

Which are major barriers to extracting meaningful insights from your data?

Complexity
18%
Unstructured
30%

Some 24% of asset owners believe that a data management platform would help them consistently extract insights from data, rather than merely manage it. A platform is one model for data management, but any solution requires digital and operational changes that present several challenges. Beyond the financial cost, these include integration difficulties with existing and legacy systems, where “half-lives” are getting shorter as the pace of innovation accelerates:

We do have skilled staff for managing current processes. But when it comes to advanced technologies, there is a skill shortage. The current teams will not be able to manage newer responsibilities.

In addition to integration difficulties with legacy IT systems and technology, firms need the right people to pursue their digital ambitions: 53% of asset managers and 28% of asset owners view recruiting or retaining skilled and specialist staff as a top priority for accelerating digital transformation.

Which factors will pose the biggest challenges to implementation?

Internal resistance to change
30%
50%
Size of investment required and/or inadequate/uncertainty around funding
47%
Lack of appropriately skilled and/or specialist staff
46%
Integration difficulties with legacy IT systems and technology
45%
Regulatory concerns
33%

Key disruptors: startups and fintechs

An overwhelming majority of both asset managers and asset owners (95%) ranked startups or fintechs as one of the top three disruptors in the sector.

These innovators have introduced efficient solutions for problem areas such as proxy voting and class actions and are streamlining communications between the triumvirate of the broker, custodian and investment manager.

To keep pace with these innovative solutions, service providers have concluded “if you can’t beat them, join them” – leading to the formation of alliances with fintechs or the onboarding of their solutions in-house.

As startups introduce new ideas each time, they are raising the benchmark for traditional firms. They are creating more competition in markets and gaining a higher market share.

This approach is not reserved for service providers – 39% of asset managers reported plans to pursue third-party partnership(s) with a fintech to accelerate digital innovation, with 22% planning to acquire a fintech to achieve the same goal. Alternatively, 61% of asset owners’ primary strategy for accelerating digital innovation is to co-create new products or services with clients.

Which do you see as the biggest disruptors in the industry?

1
  • Startups
  • Fintech
2
  • Fintech
  • Asset Owners
  • Private Investment Managers
3
  • Fintech
  • Regulators

02
Product and Asset Allocation

Multidimensional Strategy

Growing interest in broadening use of ETF structures, alternatives, and values-based investing are just some of the identifiable shifts affecting players across the asset management industry. But product design is just one area of change. For many, tackling the twin influence of technological innovation and client demand is leading to greater outsourcing opportunities.

Values-Aligned Investing Momentum Accelerating

Survey results highlight the continued focus on values-aligned investing and ESG. Over 55% of respondents ranked full integration of ESG criteria as one of the top 3 trends in the asset management industry over the next 3-5 years. When asked about expectations regarding their organizations’ offerings over the next 1-2 years, the highest proportion of respondents (87%) anticipated increasing ESG strategies in general.

The strong interest in sustainability extends beyond ESG. Green bonds – debt securities used to finance sustainable and environmental projects – are also rising in popularity. Over 60% of asset owners expect to increase their allocations in the next 1-2 years, while another 28% think allocations will be unchanged. For managers, 52% expect to see growth in green bonds, although 46% believe interest may have plateaued and will stay the same.

Valuation of companies are dependent on their ESG ratings to some extent. In private markets, ESG incorporation has become vital to ensure that the valuations will be strong during exits. Full integration of ESG criteria will become more important over time.

Balancing Customization Against Standardization

Nearly 90% of respondents have existing exposure to “customized client products,” such as direct indexing, and almost half of respondents plan to increase their exposure to the customized category in the next 1-2 years. Nuances in data, reporting, regulatory and regional requirements are all factors that could contribute to the preference of a customized solution over a commingled fund.

Active management maintains its strong presence; the majority of managers expect allocations to active strategies – equities and bonds – will be unchanged over the next 24 months. Actively managed strategies may in fact see renewed interest. So, while asset owners are still turning to ETFs for index strategies, managers are increasingly offering active ETF strategies. In fact, almost half of the managers surveyed expect to see an uptick in mutual fund conversions to ETF structures.

Underscoring this smart beta/active ETF disconnect is the juxtaposition of asset managers, keen to launch products, and asset owners almost evenly split between adding and subtracting exposures. Over the next 12-24 months, 44% of asset managers expect to increase offerings of active or smart beta ETFs; 47% expect no change. However, while only 34% of owners are looking to add more to active ETFs (37% plan to lessen exposure), passive remains more popular with 60% forecasting increased allocations to this area. This compares to just 19% of asset managers who think their passive ETF activity will increase over the next few years.

Liquid and Illiquid Alternatives Growth Story Continues

Asset managers and owners also differed in their views on alternatives. While asset managers appear more optimistic with rising interest in real estate, private credit and hedge funds, asset owners lean more towards infrastructure. More than double the asset owner respondents (68%) expect to increase infrastructure allocation versus those from asset managers (33%). Alternatively, while 42% of managers expect offerings in private credit to grow over the next two years, only 26% of owners are as sanguine.

The two groups do seem to agree on the likely increase in activity around private equity with 74% of managers and 62% of owners surveyed expecting growth in this area.

03
Outsourcing

The Rise of Front and Middle Office Outsourcing

Nearly All In-house Functions are Being Considered for Outsourcing

Respondents indicated that even core alpha generating investment functions are on the table. Some 60% or more of asset managers and owners continue to keep portfolio management and asset allocation in-house with no plans to outsource – but notable minorities of 25% and 30%, respectively, plan to either explore outsourcing or expand outsourcing in these areas. Among the groups, asset managers are more likely to outsource in these areas than asset owners.

A larger proportion of asset managers and asset owners view other front and middle office functions as the next frontier for outsourcing, often to tap into data and technology-driven services to inform decision making and mitigate risk. Outsourcing some of the activities directly contributing to investment alpha generation potentially enables managers to concentrate even more resources on delivering client and stakeholder value and identifying additional outsourcing opportunities throughout the back, middle and front offices.

Front Office Outsourcing Opportunities

Research was identified as the most outsourced front office activity – some 80% of asset managers and 41% of asset owners may embark on or expand research outsourcing. Only 9% of all respondents do not plan to outsource research activities.

Forty-five percent of asset owners already outsource trade execution of which 12% may expand it further, while 33% of both asset managers and asset owners who execute trades in-house are contemplating outsourcing.

To sharpen their competitive edge, asset managers are demanding solutions that aggregate data from in-house sources, third parties and their service providers for more actionable insights and valuable intelligence. More than 90% of asset managers have plans to begin outsourcing or increase their outsourcing of data-related activities.

Forty-five percent of respondents plan to streamline with a few best-of-suite vendors and providers to accelerate digital innovation. An additional 40% plan to increase their reliance on core financial service providers to achieve the same goal.

Middle Office Outsourcing Opportunities

The proportion of respondents open to outsourcing of the middle office varies by function, but the overall trend is toward more outsourcing in this area.

While the majority currently execute performance attribution and risk reporting in-house and have no plans to outsource it, one-third of respondents (32% and 35% respectively) are either exploring or expanding outsourcing in these areas. Some 43% also currently execute investment reporting in-house but are planning to explore outsourcing. Currently, regulatory reporting is evenly split between in-house and outsourcing, but the majority of those performing this function in-house could consider outsourcing.

Back Office Outsourcing Opportunities

The majority (76%) of respondents have already outsourced back-office services such as fund administration and fund accounting, to some extent, though some 46% may expand outsourcing further – and 16% who have inhouse back offices are considering outsourcing them.

Asset Owners Want to Retain Management of Data

Yet asset owners show some resistance to outsourcing data operations and related data management infrastructure. Only 29% currently outsource their data operations and/or analytics functions or intend to expand them. Whereas 73% of asset managers are outsourcing these functions, and just over half intend to expand outsourcing arrangements.

While sizeable minorities of both asset managers (25%) and asset owners (33%) are exploring outsourcing their still-largely in-house data operations, a large subset of asset owners (38%) report they have no intention of outsourcing these functions, a claim made by only 3% of asset managers in this survey.

The same divergence between asset managers and asset owners can be observed in how these organizations approach their data management infrastructure. Almost two-thirds of asset managers (63%) currently outsource this element of their operations, versus 42% of asset owners who do so. Moreover, almost as many asset owners (34%) emphasize the importance of keeping their data management infrastructure strictly inhouse and have no plans to outsource/explore outsourcing this part of their business.

Outsourcing in the Context of Operating Model Evolution Priorities

Outsourcing is one aspect of operating model evolution. While asset managers see opportunities for evolving operating models throughout or across the business, the highest proportion (39%) expect the front office to be in the vanguard of change.

Conversely, 48% of asset owners are still concentrating on the back office (versus 29% of asset managers), highlighting their focus on leanness and optimization of operational efficiency as they look to reduce costs. However, a significant share of asset owners (34%) expects the front office to drive the greatest change in their end-to-end investment life cycle over the next few years, further underscoring the growing awareness of game-changing services, such as data analytics and AI.

How Outsourcing Dovetails with other Operating Model Priorities

Almost half of asset managers and 40% of asset owners say assessing the need for additional outsourcing to support their operating model will be one of their top three priorities over the next 1-2 years, behind achieving scalability and resilience and accelerating existing technology programs. Of course, these three aims can be inter-related and complementary. Some respondents have explicitly linked outsourcing to technology upgrades. And outsourcing is being used to address a need for more specialized talent required for digital transformation.

Our priorities, including technology upgrades, do call for changes in our operating model. Additional outsourcing can provide more support to our teams to complete work efficiently.
It’s time to address the skills shortage. We will consider outsourcing to bridge the skills gap. We need to become more competent and also adapt to the technology advancements quickly.

Balancing and Optimizing Outsourcing Objectives

There’s no question the rapid pace of technology development is a major catalyst for outsourcing. The high value asset managers place on data and analytics — and the recognition that functions can be efficiently and effectively outsourced to service providers must also be balanced between risk management and their objective for outsourcing: achieving scale in a cost-efficient manner.

Scalability options are considered on a regular basis. However, there are quite a few constraints due to inflation and the increasing cost of operations. We are pursuing scalability options strongly even in these challenging conditions.

Outsourcing can also lead to consolidating vendor relationships. Nearly half of asset managers and 43% of asset owners view streamlining operations with a few best-of-suite vendors and providers as the most effective strategy for driving digital innovation and operational transformation.

Increasing efforts on resiliency is very important because the market environment is changing. The reactions to the Russia-Ukraine war and the related geopolitical disturbances are affecting investment choices, and we have to build more resiliency.

04
Distribution

Direct to Consumer: Managers’ Longterm Goal

Asset managers expect the distribution environment will change in the years ahead as their growth priorities shift from a reliance on intermediaries to institutions, with the goal of significant expansion of the direct to consumer (D2C) channel. Just over half of asset managers globally expect D2C to offer the largest opportunity in the longer term. Notably, D2C ambitions are greater in North America and APAC than in EMEA.

Most asset manager respondents have existing D2C capabilities: 89% already distribute directly to consumers and 72% want to increase these capabilities over the next three years, while also anticipating the growth opportunity for D2C to unfold over a longer time horizon of five to 10 years.

In the short term, traditional intermediaries (banks, fund platforms, intermediaries and insurers) are expected to power growth.

illustration
89%

of asset managers distribute directly to consumers

72%

want to increase these capabilities over the next 3 years

Brokers/dealers serving ‘mass affluent’ and high-net-worth individuals can sell more products and attract higher allocations. There are more opportunities associated with this distribution channel in the next three years.

In the next five years, institutional relationships and D2C are equally ranked: globally, 34% of respondents rank each as the top growth channel, though there are regional differences. In EMEA, 49% prioritize institutions and 21% D2C, whereas in North America, 26% prioritize institutions and 46% prioritize D2C.

Only over the long run do asset managers really gain confidence in ramping up a direct to consumer approach, with over half of global respondents ranked it as a top growth opportunity. Notably, this ambition is stronger in North America (64%) versus EMEA, where D2C ranks equally with institutions for distribution at 41%.

D2C will be one of the most systematic distribution channels in the next five to 10 years. There are digital solutions available for optimizing these channels and these solutions will be used effectively.

Supporting the Shift

Service providers’ distribution support is expected by 54% of asset managers, and this group is focused not only on direct help with distribution channels, but also on enlisting expertise at a much earlier stage in terms of structuring investment vehicles.

They seek a range of advisory services (choosing domiciles and fund structures; registering funds and various reporting requirements), which are often provided by law and accountancy firms, as well as fund and managed account platforms and third-party management company structures.

Raising the Digital Game

Respondents also associate the anticipated D2C growth opportunity with technology:

For those looking at digital solutions within distribution – personalization is a prime goal. Survey respondents highlighted enhanced client experience as one of the main ways digital tools may be used in distribution. This trend seemed to be a higher priority in APAC and EMEA - 30% of the former were looking at greater personalization while 23% in EMEA highlight it as the most important goal, versus 18% in North America.

In tandem with enhancing digital capabilities to support distribution strategies, a focus on data still prevails. Twenty four percent of asset manager respondents cited improved availability of real-time portfolio/account information as the highest priority for digital use in distribution.

Overall, asset managers have a long wish list for digital capabilities they intend on leveraging to improve distribution. Over half identified six objectives, including self-service options for clients, customized sales campaigns, delivery of investment advice, personalized client experience and real time portfolio information for clients.

Traditional channels will not be as popular long term. D2C options are entering the market as technology develops and this will change the way products are distributed.

Shift in Geographies Eyes on Europe and Asia Ex China

Familiarity with Europe is causing globally positioned asset managers to lay deeper roots in the continent rather than in frontier markets. Over half of all asset managers surveyed (55%) plan to either enter or expand their business in Europe (excluding the U.K.) over the next three years, and only 12% plan to exit Europe – thus creating a net positive balance of 43%. In the U.K., 79% are currently actively distributing products to investors and a net 8% expect to exit the U.K. in the next three years.

The largest European economies are a focus: “Further expansion in Europe is being considered. We are concerned about the geopolitical conflicts in the region but there are good prospects in Germany, Italy and France.” – Partner, Private Equity Fund, Sweden.

The next largest net positive balance is Asia Pacific, excluding China and Japan, where 17% plan to enter or expand. Japan also showed a net positive balance of 11% planning to enter or expand their business there over the same three-year timeframe.

With 90% already active in the U.S., the net positive balance for expansion is only 7%.

The largest net negative balance is seen in China: 19% plan to exit and only 5% will enter or expand, for a net negative of 14%.

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For clients located in Switzerland: The information provided herein does not constitute an offer of financial instrument or an offer to provide financial service in Switzerland pursuant to or within the meaning of the Swiss Financial Services Act (“FinSA”) and its implementing ordinance. This is solely an advertisement pursuant to or within the meaning of FinSA and its implementing ordinance. Please be informed that The Bank of New York Mellon and The Bank of New York Mellon SA/NV are entering into the OTC derivative transactions as a counterparty, i.e. acting for its own account or for the account of one of its affiliates. As a result, where you enter into any OTC derivative transactions with us, you will not be considered a “client” (within the meaning of the FinSA) and you will not benefit from the protections otherwise afforded to clients under FinSA.

BNY Mellon Saudi Financial Company is licensed and regulated by the Capital Market Authority, License number 20211-04, located in Alfaisaliah Tower, 18th Floor, King Fahad Road, P.O. Box 99936 Riyadh 11625, Kingdom of Saudi Arabia.

The Bank of New York Mellon, Singapore Branch, is subject to regulation by the Monetary Authority of Singapore. For recipients of this information located in Singapore: This material has not been reviewed by the Monetary Authority of Singapore.

The Bank of New York Mellon, Hong Kong Branch (a branch of a banking corporation organized and existing under the laws of the State of New York with limited liability), is subject to regulation by the Hong Kong Monetary Authority and the Securities & Futures Commission of Hong Kong.

The Bank of New York Mellon, Seoul Branch, is a licensed foreign bank branch in Korea and regulated by the Financial Services Commission and the Financial Supervisory Service. The Bank of New York Mellon, Seoul Branch, is subject to local regulation (e.g. the Banking Act, the Financial Investment Services and Capital Market Act, and the Foreign Exchange Transactions Act etc.).

The Bank of New York Mellon is regulated by the Australian Prudential Regulation Authority and also holds an Australian Financial Services Licence No. 527917 issued by the Australian Securities and Investments Commission to provide financial services to wholesale clients in Australia.

The Bank of New York Mellon has various other branches in the Asia- Pacific Region which are subject to regulation by the relevant local regulator in that jurisdiction.

The Bank of New York Mellon, Tokyo Branch, is a licensed foreign bank branch in Japan and regulated by the Financial Services Agency of Japan. The Bank of New York Mellon Trust (Japan), Ltd., is a licensed trust bank in Japan and regulated by the Financial Services Agency of Japan. The Bank of New York Mellon Securities Company Japan Ltd., is a registered type 1 financial instruments business operator in Japan and regulated by the Financial Services Agency of Japan.

The Bank of New York Mellon, DIFC Branch, regulated by the Dubai Financial Services Authority (DFSA) and located at DIFC, The Exchange Building 5 North, Level 6, Room 601, P.O. Box 506723, Dubai, UAE, on behalf of The Bank of New York Mellon, which is a wholly-owned subsidiary of The Bank of New York Mellon Corporation. Past performance is not a guide to future performance of any instrument, transaction or financial structure and a loss of original capital may occur. Calls and communications with BNY Mellon may be recorded, for regulatory and other reasons.

Disclosures in relation to certain other BNY Mellon group entities can be accessed at the following website: https://www.bnymellon.com/emea/en/disclaimers/eu-disclosures.html .

This document and the statements contained herein, are not an offer or solicitation to buy or sell any products (including financial products) or services or to participate in any particular strategy mentioned and should not be construed as such. This material is intended for wholesale/ professional clients (or the equivalent only), is not intended for use by retail clients and no other person should act upon it. Persons who do not have professional experience in matters relating to investments should not rely on this material. BNY Mellon will only provide the relevant investment services to investment professionals.

Not all products and services are offered in all countries.

If distributed in the UK, this material is a financial promotion. If distributed in the EU, this material is a marketing communication.

This material, which may be considered advertising, is for general information purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter. This material does not constitute a recommendation or advice by BNY Mellon of any kind. Use of our products and services is subject to various regulations and regulatory oversight. You should discuss this material with appropriate advisors in the context of your circumstances before acting in any manner on this material or agreeing to use any of the referenced products or services and make your own independent assessment (based on such advice) as to whether the referenced products or services are appropriate or suitable for you. This material may not be comprehensive or up to date and there is no undertaking as to the accuracy, timeliness, completeness or fitness for a particular purpose of information given. BNY Mellon will not be responsible for updating any information contained within this material and opinions and information contained herein are subject to change without notice. BNY Mellon assumes no direct or consequential liability for any errors in or reliance upon this material.

This material may not be distributed or used for the purpose of providing any referenced products or services or making any offers or solicitations in any jurisdiction or in any circumstances in which such products, services, offers or solicitations are unlawful or not authorized, or where there would be, by virtue of such distribution, new or additional registration requirements.

Any references to dollars are to US dollars unless specified otherwise.

This material may not be reproduced or disseminated in any form without the prior written permission of BNY Mellon. Trademarks, logos and other intellectual property marks belong to their respective owners.

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