FUSE Blog

Total estimated inflows to long-term mutual funds were $6.34 billion for the week ended Wednesday, January 18, according to the Investment Company Institute (ICI). Domestic equity slipped back into the red by posting outflows of $804 million, while foreign equity managed to gather $330 million in net inflows. Despite posting a 38% decrease from its total inflows during the prior week, taxable bond continued to drive sales with inflows of $3.8 billion. Inflows from municipal bond remained static from the prior week, collecting approximately $1.7 billion. Also, hybrid funds have maintained their positive streak since late November, with nearly $1.3 billion in net inflows during the week.


Source: Investment Company Institute

1) Study Quantifies Benefit of Retirement Advisor
    401khelpcenter.com  |  1/13/2012

Because…The more plan sponsors rely on plan advisors, the more help plan advisors will need from service providers. Working with retirement plan advisors requires a different set of skills than servicing advisors in other market segments. Firms should have dedicated resources to cultivate long-term relationships, share insights to help them stay abreast of industry trends, develop strategies to assist them in expanding business, and provide customizable tools for them to deliver better services to their clients.

2) SPY, The 1st US ETF, Now A $100 Billion Fund
    IndexUniverse.com  |  1/20/2012

Because… The rise of SPY assets to $100 billion indicates more investors are embracing ETFs for portfolio construction. SPY, one of the most widely held and heavily traded ETFs, has been used by investors for both strategic and tactical purposes. While its dominance will not be challenged in the near future, the competition from other similar offerings--such as iShares S&P 500 Index Fund, Vanguard S&P 500 ETF, and Rydex S&P 500 Equal Weight ETF--should not be shrugged off.

3) IRI Exclusive Report: The Retirement Readiness of Generation X
    IRI  |  1/23/2012

Because… The need for helping Gen Xers is pressing as the information overload, recent market crash, and lack of investment education have shaken their confidence about making sound financial decisions. Compared with Baby Boomers, Gen Xers face tougher financial realities because it may take longer for them to pay off all their debt, they are less likely to receive pension benefits, Social Security income cannot be counted on, their life expectancy will be increased, and medical costs will rise by the time they retire.

Click here for FUSE trends for 2012. 

Total estimated inflows to long-term mutual funds were $11.25 billion for the week ended Wednesday, January 11, according to the Investment Company Institute (ICI). This intake reverses the red tide of three consecutive weeks of net outflows and marks the first time since the beginning half of 2011 we’ve seen such an impressive total. Most noteworthy are the positive net inflows of $753 million in domestic equity. Investors have not put their dollars in U.S. stock funds since August. Meanwhile, foreign equity also drew $681 million. Taxable bond drove sales with $6.1 billion, while municipal bond garnered $1.7 billion. Hybrid funds gathered nearly $2.0 billion, a record since collecting $2.3 billion in early November.


Source: Investment Company Institute

1) Funds Trail S&P 500 Index by Most Since 1997
    Bloomberg  |  1/10/2012

Because… Improving fund performance is crucial for asset management firms to boost investor confidence and bring them back to the equity market. While telling investors to stay the course is absolutely necessary, the message won’t be effectively delivered if funds keep generating lackluster returns. It has become increasingly harder to outperform benchmarks. It is time for firms to reassess their models, revise investment strategies, and incorporate new factors that can better deal with market volatility.

2) Charles Schwab Launches Unique 401(k) Plan Solution Designed to Address Barriers to Retirement Saving and Investing
    Business Wire  |  1/10/2012

Because… The DOL’s rules on fee transparency, plan sponsors’ fiduciary concerns, and plan participants’ demand for low-cost options all drive a shift toward a greater use of passive investments. Though Schwab is not the only firm that offers an all-index option for 401(k) plans, its inclusion of both proprietary and non-proprietary funds, an independent advisory service, and an interest-bearing, FDIC-insured savings feature could make the new Schwab program popular among plan sponsors.

3) Transamerica Study Reveals Women Don’t Talk Enough About Retirement
    Transamerica  |  1/10/2012

Because… The research found only 8% of women surveyed believed they are building a large enough retirement nest egg. As more women enter the workforce, take managerial positions, or own small businesses, they have become wealthier than decades ago. On the other hand, women tend to live longer, spend more, and are less knowledgeable about financial matters. So they present a tremendous opportunity for advisors. Asset managers that can help advisors tap into this market segment will set them apart from the competition.

Total estimated outflows from long-term mutual funds were $5.59 billion for the week ended Wednesday, January 4, according to the Investment Company Institute (ICI). The first week of the New Year marks more than double the amount of $2.6 billion in outflows experienced during the prior week. Domestic equity and foreign equity remained in the red, shedding $7.1 billion and $2.3 billion, respectively. On the other hand, taxable bond continued to drive sales with $2.1 billion in net inflows, while municipal bond gathered nearly $1.2 billion. Hybrid funds maintained its streak of inflows by garnering $457 million.

 
Source: Investment Company Institute

1) Pimco Attracts $60 Billion as New Stock Funds Offset Total Return’s Woes
    Bloomberg  |  1/5/2012

Because… Fund firms could take a leaf out of PIMCO’s book. While investors’ flight to fixed-income instruments has certainly helped PIMCO raise assets, it is the firm’s product development effort that has contributed to its significant asset growth. From the introduction of go-anywhere funds to the expansion into stocks, PIMCO has built a solid, diversified product line that gives the firm the ability to weather various market environments without relying solely on its flagship fund.

2) ETF Growth Slows in 2011
    On Wall Street  |  1/5/2012

Because…Although numbers indicate a slowdown in 2011, we expect the ETF industry to continue its growth in a difficult market. The big three – iShares, SSgA, and Vanguard – will remain dominant, but there should be room for other players as well. The rise of alternative fund sponsors (e.g. IndexIQ and ETF Securities) and new entrants with enhanced-index offerings (e.g. Russell and Northern Trust) shows that true innovations that meet investor needs, rather than opportunistic attempts, will improve an ETF provider’s chance of success.

3) Wave of New Offerings Coming from Flagging American Funds
    Investment News  |  1/9/2012

Because… The headline that a firm which rarely launches funds will roll out new offerings evoked much enthusiasm, but the fledgling enthusiasm dissipated the minute we learned that each of eight funds will be a fund-of-funds that invests in existing American funds. Investors are already pulling money out. Would new funds composed of existing funds be able to stem massive outflows? Would new funds be closet indexers as the holdings overlap issue among American funds has become a growing concern? Questions like these need to be answered…

Total estimated outflows from long-term mutual funds were $2.62 billion for the week ended Wednesday, December 28, according to the Investment Company Institute (ICI). This estimated total marks the third week of overall outflows suffered during the month of December. As was the case throughout the majority of the year, domestic equity drove outflows of nearly $4.0 billion, while foreign equity experienced $1.2 billion in outflows. Taxable bond led inflows, despite only capturing $1.2 billion—its lowest inflow throughout the month. Municipal bond gathered $977 million in net inflows. Throughout the month, hybrid funds remained in the black and gathered $389 million during the week. 


Source: Investment Company Institute