FMX | Connect – www.fmxconnect.com - (Reported 5/20/2010)
Equity funds gain traction in spite of strong flows into fixed income funds. Equity funds have higher yields so this trend will boost revenues for equity managers.
By tracking returns and flows on each of the funds from each manager we estimate inflows and market returns on the companies’ AUMs before they are reported.
-TROW: we track 110 funds accounting for 98% of mutual fund assets. Other portfolios (40% of assets) mimic the returns of equity funds.
-BEN: we track 513 funds accounting for 73% of total AUM.
-WDR: we track 68 funds accounting for 96% of mutual fund assets. Institutional accounts (11% of assets) mimic the returns of portfolios in advisor accounts.
-JNS: we track 125 funds accounting for 91% of mutual fund assets. Separate accounts (30% of assets) mimic returns of mutual fund portfolios.
Equity funds are beginning to capture a larger portion of total flows. Increases in inflation will reinforce the trend, boosting equity managers’ revenues.
April saw consistent inflows into equity funds, which saw net inflows of almost $14 bn. The increased volatility in equity markets experienced during the first weeks of May turned inflows into outflows.
The deficit of US Defined Benefit pension plans ($252 bn at the end of March) will require sponsoring companies to increase their allocation to equities (seeking higher yields) or increase contributions (or a combination of both). The trend will benefit institutional equity managers like TROW, AMG and IVZ.
Money Market funds continue to lose funds as low yields and regulatory overhang continue to put pressure on the sector.
ETF assets continue their growth, competing with traditional funds for assets, particularly those of institutions.
Source: ERDESK
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