C _ Group Management Report Business environment 2021 for the asset management industry The asset management industry continued to deliver high returns in 2021, as the global economy further recovered from the COVID-19 pandemic. Constructive investor sentiment was supported by stimulus from monetary and fiscal authorities despite rising inflation rates. Equities performed particularly well, with the MSCI World Index rising by 21.8 % in 2021, reaching another record level. For bonds, the interest rate volatility made for a challenging environment, with asset selection being the key to achieving higher returns. Although active investments still accounted for the greatest share of assets under management globally, growth in both passive and alternative investments continued. Similarly, the societal focus on carbon emissions and the need to transition to a low-carbon economy led to continued growth in ESG-compliant offerings (ESG = Environment, Social, Governance). During 2021, asset managers continued to invest in digitalization as an additional enabler for client interaction as well as for operational efficiency. Technology has become even more important to drive customer engagement, alpha generation, and regulatory as well as tax reporting. 76 Annual Report 2021 − Allianz Group