Survey finds 60% of managers fear erosion of central bank independence; 2024 AUM growth of 12% may be unsustainable.

The Investment Management Association of Singapore's 2026 Outlook Survey reveals that fund managers are bracing for market volatility and structural headwinds after a strong 2024, with 60% concerned about central bank independence. After a year of record asset growth and surging net inflows in 2024, Singapore's fund management sector shifted to a more cautious posture in 2025 as global equity selloffs, tariff escalations, and mounting structural pressures reshaped the operating environment.

2024: A Record Year for Singapore's Fund Management Hub

Singapore's asset management industry entered 2025 with formidable momentum. According to the Monetary Authority of Singapore's 2025 Asset Management Survey, total assets under management in Singapore rose 12% year-on-year to S$6.07 trillion in 2024. Net inflows into the sector jumped 50% year-on-year to S$290 billion, reflecting sustained demand from both institutional and retail investors across Asia and beyond.

The accumulation of capital was not limited to the asset management sector alone. Temasek's asset management companies held over S$90 billion in AUM as at 31 March 2025, spanning third-party capital and Temasek's own capital across entities including Seviora Holdings, Vertex Holdings, and Decarbonization Partners, according to the Temasek Review 2025. Meanwhile, household net worth in Singapore reached S$2.2 million per household in 2025, up approximately S$220,000 since 2023, based on data from Singapore Statistics reported in March 2026.

AUM (S$ billion)Source: Orionmano Industries

Global Shock Waves: Tariffs and Equity Selloffs Hit 2025

The strong 2024 baseline contrasts sharply with the subdued activity that followed. The April 2025 U.S. tariff announcements triggered global equity selloffs in the U.S. and Asia, accompanied by a sharp rise in the VIX volatility index, as documented in the IMF's 2025 Article IV Consultation for Singapore. Singapore's stock market dropped by 12.1% in the first week of April 2025 alone.

The IMF report notes that domestic financial conditions in Singapore tightened sharply in April 2025, though they have since eased. However, the Fund warned that escalating trade uncertainty could re-tighten financial conditions going forward, reducing cross-border capital flows and putting further pressure on the financial sector. On a global level, GDP growth declined relative to the reference forecast, reflecting a large impact from higher tariffs, elevated uncertainty, and tighter financial conditions, weighing on exports, foreign and domestic private investment, and consumption.

The IMF's adverse scenarios for Singapore suggest the financial sector could face additional pressure from a further tightening of global financial conditions, leading to higher foreign exchange borrowing costs, a reduction of cross-border capital flows, and a worsening in credit quality. Liquidity support to banks may be needed if the shock and its impact deepen, and macroprudential policies should be adjusted to safeguard financial stability.

Structural Pressures and Margin Erosion Weigh on Managers

Even before the tariff shock, Singapore's fund managers were grappling with entrenched structural challenges. The IMAS 2026 Outlook Survey, released in January 2026, identifies "the rise of passive solutions" and "ongoing margin erosion" as the top threats to the asset management industry over the next 12 months. These are familiar pressures that have been reshaping fee structures and revenue models across the global asset management industry for years.

However, the 2026 survey marks the emergence of a new anxiety: the fear that strong market performance in 2025 may be unsustainable. Managers appear increasingly sensitive to market durability alongside the long-standing structural challenges. The survey also reveals that 60% of respondents express concern that the independence of major central banks may erode in 2026, reflecting anxieties over political encroachment on monetary policy. A significant 69% of managers expect the U.S. Federal Reserve to implement rate cuts exceeding 0.50% by year-end 2026, signaling expectations for monetary easing even amid macroeconomic uncertainty.

Manager Sentiment: Cautious but Seeking Opportunities in Asia

The IMAS survey, now in its 11th edition, gathered insights from C-suite professionals across 63 IMAS member firms. These participants, including Singapore-based fund managers and asset owners, collectively oversee more than USD 35 trillion in global assets. Despite the cautious outlook, the survey reveals a decidedly positive sentiment toward Asian markets for 2026.

Japan and China were each cited by 21% of respondents as the most promising markets for 2026. India (13%), Singapore (11%), and Taiwan (11%) round out the top five high-conviction markets. This geographic focus underscores Singapore's positioning as a gateway to Asian capital markets, even as managers anticipate heightened geopolitical risks and market volatility in the year ahead.

The data paints a picture of an industry that is well-capitalised and strategically positioned but navigating a more turbulent period. The S$6.07 trillion AUM base and the structural deepening of Singapore's capital markets provide a resilient foundation. Yet the combination of trade uncertainty, potential central bank politicization, margin compression, and passive fund growth creates a complex environment for fund managers in 2026. The 12% growth of 2024 may prove difficult to replicate as managers balance caution with conviction in Asian opportunities.