FUSE Blog

Total estimated inflows to long-term mutual funds were $6.91 billion for the week ended Wednesday, May 9, according to the Investment Company Institute (ICI). This intake is a dramatic increase from the $2.2 billion gathered during the prior week. Although Equity funds continued in the red, the $2.4 billion in net outflows among Domestic Equity funds was an improvement from the nearly $5.5 billion in outflows during the prior week. World Equity garnered $1.1 billion—another uptick from the $142 million gathered during the prior week. Taxable Bond continued to drive sales with nearly $6.1 billion, while Municipal Bond took in $1.5 billion. Hybrid funds posted $617 million in net inflows compared to $36 million during the prior week.


Source: Investment Company Institute

1) Schwab Research Finds Gap Between Employer and Employee Views on Retirement Preparedness Through 401(k) Plans
    Business Wire  |  5/7/2012

Because… The two Schwab surveys again highlight the need for financial firms to make people aware of the urgency of retirement savings. Firms need to stress the importance of contributing to retirement plans regardless of market conditions. The fear for asset erosion has shaken investor confidence and deterred them from adding more to their retirement accounts. Firms should send the message to investors that bad market timing and impulsive decisions can really hurt their retirement portfolios.

2) Credit Suisse's Asset Management Division Launches Credit Suisse Liquid Alternative Fund
    PR Newswire  |  5/10/2012

Because… Investors who are turning to alternatives for diversification and risk management are placing increased emphasis on liquidity. While some insist illiquid investments can produce alpha in the long run, more investors seem to favor registered, liquid, transparent alternatives. The volatile market in recent years has heightened the need for liquidity. As a result, a growing number of fund managers are using liquid instruments to replicate risk and return profiles of hedge strategies.

3) Deutsche Bank and Guggenheim Partners Focus Their Discussions on a Potential Sale of RREEF
    Deutsche Bank |  5/11/2012

Because…Just as we thought DWS Investments would likely become a part of Guggenheim, the talks between Deutsche Bank and Guggenheim fell apart. The future has remained unclear for a firm that has already gone through a series of acquisitions in the past. This uncertainty will potentially have a negative impact on portfolio manager turnover, investment culture, and fund performance records, which in turn can affect the firm’s value on the market.

Total estimated inflows to long-term mutual funds were $2.24 billion for the week ended Wednesday, May 2, according to the Investment Company Institute (ICI). Equity funds slipped back into negative territory with $5.3 billion in net outflows after posting inflows during the prior week. Domestic Equity experienced $6.6 billion in net outflows, while World Equity gathered $1.3 billion in net inflows. Taxable Bond continued to drive sales, with $6.4 billion in net inflows, representing a 37% increase from the prior week’s total. With nearly $1.1 billion in net inflows, Municipal Bond saw a 31% increase from its intake during the prior week. On the other hand, Hybrid funds stayed in the black with $36 million in net inflows, but it was a significant decline from the $945 million intake during the prior week.


Source: Investment Company Institute

Total estimated inflows to long-term mutual funds were $7.60 billion for the week ended Wednesday, April 25, according to the Investment Company Institute (ICI). This total estimated intake represents a 25% increase from last week’s inflows of $6.10 billion. Equity funds experienced its second consecutive week in positive territory with $927 million. Domestic Equity suffered $1.6 billion in net outflows—a marked improvement from $8.7 billion in outflows during the prior week—while its World counterpart gathered $2.5 billion in net inflows. Taxable Bond continues to lead sales with nearly $4.9 billion in net inflows. Municipal Bond garnered $825 million, a dramatic uptick from $399 million during the prior week. With $995 million in net inflows, Hybrid funds experienced an 18% drop from the prior week’s intake of $1.2 billion.


Source: Investment Company Institute

Total estimated inflows to long-term mutual funds were $6.48 billion for the week ended Wednesday, April 18, according to the Investment Company Institute (ICI). Equity funds managed to pull in $48 million during the week, but its two components represented opposite sides of the spectrum. While Domestic Equity bled $8.68 billion in net outflows, Foreign Equity garnered $8.73 billion in net inflows. With nearly $1.2 billion in inflows, Hybrid funds experienced an 87% increase from its intake during the prior week. Investors continue to remain conservative, putting nearly $4.9 billion and $399 million into Taxable and Municipal Bond funds, respectively.



Source: Investment Company Institute

1) CITs Present Huge Opportunity for Investment Managers in Projected $7 Trillion DC Market
    SEI  |  4/17/2012

Because… The downward fee pressure has driven plan sponsors to look for investment managers that offer collective investment trusts (CITs). Fund firms that consider launching CITs need to assess opportunities and challenges, determine how the CIT fits into their overall business and investment management strategy, evaluate target markets, and develop fee structures and distribution strategies that would be least likely to cannibalize existing business.

2) ICI and U.S. Chamber of Commerce File Lawsuit Challenging CFTC Rule
    ICI  |  4/17/2012

Because… The lawsuit was filed with the belief that all funds would be affected by the CFTC rule. ICI and the Chamber of Commerce argue that “the CFTC’s new rule looks more like regulation for regulation’s sake. The new rule creates confusion, not clarity, by subjecting mutual funds to redundant, overlapping, and unnecessary regulatory requirements. The CFTC completely ignored its statutory duty to evaluate the costs this unnecessary regulation will undoubtedly impose on the economy.” We will monitor how this case will unfold.

3) ETF Providers Announce Creation of the National ETF Association, "NETFA", the First US-Based ETF Industry Trade Association
    PR Newswire  |  4/23/2012

Because…Although investors now have an easy access to ETFs, many of them still do not have adequate ETF knowledge. There are misunderstandings even among regulators, which will undoubtedly hurt ETF industry growth. If the newly-established METFA can play an active role in educating investors and regulators, help them separate myths from realities, and represent ETF sponsors in public debates and the rule-making process, it will benefit the industry in the long run.

Total estimated inflows to long-term mutual funds were $3.87 billion for the week ended Wednesday, April 11, according to the Investment Company Institute (ICI), marking a 48% decrease from the prior week’s estimated inflows. All objectives witnessed decreases from the prior week with the exception of Domestic Equity despite experiencing outflows. Domestic Equity’s outflow of $1.5 billion was an improvement from $4.5 billion in outflows during the prior week. Foreign Equity gathered $617 million in net inflows, bringing Equity’s overall outflows to $918 million. With $630 million in net inflows, Hybrid funds witnessed a dramatic 42% decrease from the prior week. Taxable Bond funds drove sales with nearly $3.9 billion in inflows but suffered a 57% decrease from its intake during the prior week. Municipal Bond collected $267 million in net inflows—its lowest intake this year with the exception of falling into the red during the week ended March 21.



Source: Investment Company Institute

1) Can Corporate Culture Predict Fund Performance?
    The Wall Street Journal  |  4/11/2012

Because… Even though the academic research found little correlation between Morningstar’s stewardship ratings and fund performance, we still believe Morningstar’s criteria which examine corporate culture, fund board quality, manager incentives, fund fees, and regulatory history can help investors evaluate asset managers and make informed decisions. These factors are not supposed to be the only measures in fund selection, but they can be valuable tools to complement quantitative analyses.

2) BlackRock's Street Shortcut
    The Wall Street Journal  |  4/12/2012

Because… This will be the first initiative by an asset manager to set up its own bond trading platform. BlackRock’s goal of launching such a platform is to reduce trading costs, but significant challenges may lie ahead. It remains unknown how many institutional investors will sign onto the platform, whether the platform can provide the necessary liquidity and tight bid/ask spreads, and how well it will perform with a limited number of users when markets become extremely volatile.

3) Commodities Funds Under Fire
    Investment News  |  4/15/2012

Because… The rule that requires the registration with the CFTC will impose a considerable burden on fund providers that already register with the SEC and add compliance costs to already expensive commodities funds. Commodities have been found to be more closely correlated to the broad stock market over the past three years. The increased correlation and heightened regulatory scrutiny will potentially slow down the development of commodities funds.