Ali Dibadj: Great. Thanks for those questions, Ken. First, from a U.S. intermediary perspective, it is very broad-based success. We are gaining market share and growing across the board. And absolutely being able to deliver something like an active fixed-income ETF just increases both that product breadth and growth and we still have a long way to go, by the way, but also increases our relevance with the client base to bring them other products as part of the suite of products that we bring to bear. The changes that we’ve made in U.S. intermediary are quite apparent. They include investments in technology and data. They include selectively changing talent, upgrading talent. They include changing the incentive plans, so that they’re aligned with growth, growth exactly as you would think about it, Ken, both from a revenues perspective as well as a profitability perspective.
And so the improvements are pretty broad. And, of course, there are sometimes some stars in those areas and we’re happy to have one, but they’re very broad-based. Taking a step even more broad than that, if you think about where we’ve had the highest inflows, they are exactly half in fixed income and half in equities of our top 10 inflows, call it, over the course of the period of time. So we feel like they’re pretty broad-based. I’ll start with the equities piece and then maybe hand it off to Roger for the performance fees element to that and the margins element. Even in equities, you are aware and we are all aware, for better or for worse, that the trend in flows in the U.S. intermediary channel has been negative from a flow perspective. So we would be having to gain a ton of share, not just a little bit of share, which is what we’re doing, but a ton of share to change that trajectory.
That is our intent over time. That is certainly what we’re gunning for. But right now, we are gaining share in that marketplace as best as we can tell, even on the equity side. And overall, we’re gaining share, obviously, if you then include the active fixed income ETF suite that we have. Roger, do you want to talk about the revenues and the margins?
Roger Thompson: Sure. Yes, as you say, the fee rates on the fixed income ETFs, as Ali has pointed out, they’re active products. So they are – they have real fees on them. They are lower than equity mutual funds, yes. But they are certainly products that have scale to them. So from a margin point of view, as we grow these, then very much they add to the bottom line. And again, as a reminder, as Ali just said, it’s a mix of products that we’re selling. And our overall fee rate is something that I think does differentiate us. Our overall fee rate year-on-year was down less than a percentage point – sorry, less than a basis point. And that’s a trend that we’ve seen over a few years of a very stable fee rate. And that’s because of the mix of products that we sell.
And again, what will drive that in the future, in the short term, it’s most driven by markets. If equity markets go up, our fee rate will go up probably. And over the longer term, it depends on the mix of products that we sell. Probably the biggest opportunity we have is following the success that we’ve had of turning around. And hopefully there’s more growth to come from U.S. institutional and broader, as you say, is turning around the EMEA business, which has been really tough in the marketplace generally. But obviously that’s also a higher fee business, the EMEA and LATAM and Asian businesses. So there’s a mix of products that we’ve got out there with a mix of fees. But yes, we’re very – it’s a strong product with strong profitability as we add assets to it and we hope to continue to add assets to those fixed income ETFs.
Operator: Our next question comes from Patrick Davitt of Autonomous Research. Patrick, please go ahead.
Patrick Davitt: Hi. Good morning. Thanks. So you’ve been talking about rebuilding the pipeline for a few quarters now. Could you maybe update us on how that process is progressing? And is there any idea when we could see more tangible or visible progress rebuilding that pipeline? And more specifically, any known big wins or losses coming through in the first half of the year? Thank you.
Ali Dibadj: Hi, Patrick. Thanks. You’re right. We are rebuilding the pipeline. Remember that last year we had around $7 billion positive in flows in the institutional pipeline or in the institutional numbers that we had in terms of net flows. All of that happened in the first quarter. So as we’ve talked about before, there was real pent-up demand to kind of figure out what Janus Henderson was all about in a transformation period. And that pent-up demand has been released. So since then, really in the back half of 2023 and ongoing, we’re building up that pipeline again. And that, as you know, as everybody on the phone knows, takes quite a bit of time in the institutional channel. The progress we’re making is actually quite tangible.
So if you think of leading indicators, meetings, as an example, with clients or consulting discussions that we’re having, it looks quite positive. And the early to mid-state pipeline, I would call it, looks good, but these things take time. We’ve talked about things taking 12 to 18 months or more, right, in terms of actually going from a concept or an RFP to actual delivery. And that’s the timeframe we should think about. From an early wins or losses perspective, we’re finding real areas of interest in thematics for us, in solutions, in areas of income, we mentioned fixed income in an earlier discussion, as well as enhanced index and some multi-asset areas, plus some regional kind of specializations that we have. So we expect that to continue as well for the pipeline as it builds over the next little while.
Patrick Davitt: Thanks. And then for my second question, I have a higher level question. BlackRock highlighted significant acceleration in passive ETFs and ETFs in EMEA on their call. And we can certainly see that in the numbers and regulators, both in the UK and the continent appear to be very focused on value for money and asset management. So with all that in mind, how are you thinking about the EMEA business positioning if that region truly is on the same path as the U.S.? And are you concerned that could complicate your path to consistent net inflow? Thanks.
Ali Dibadj: Yes, thanks for the question. Look, we’re aware of what some of our competitors say and we’re obviously very much in touch with both the regulators and what happens in the marketplace. I would say maybe three things. The first one is that we clearly have strengthened ETF – ETF franchises that we’ve built in the U.S. And we do think that there is an opportunity to grow those over time in other parts of the world as well, using some of the similar skill sets. Now, what I would say is the nascence of ETFs in the EMEA and other markets is still early. And in the U.S., we’re certainly getting to the party where there is a real resurgence of flows. So it’s a resource allocation question. And certainly the U.S. is a main place where we’re going to focus for that activity for the time being.
