Asset managers’ inadequate response to the rise of cheap, index-tracking funds has left them vulnerable to a new assault, this time from technology giants such as PayPal Holdings Inc. and Amazon.com Inc., Moody’s Investors Service said in a report.

The industry is “vulnerable to competition from technology-enabled new entrants, particularly with regards to distribution,” Stephen Tu, a senior analyst at the ratings company in New York, wrote in the report published Tuesday.

Relatively low barriers to entry and pressure on fees have left traditional money managers weakened, he wrote.

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