FUSE Blog

1) Aberdeen to Launch First Global Brand Advertising Campaign
    Aberdeen  |  5/8/2013

Because… Aberdeen’s first ever global advertising campaign in its 30-year history demonstrates the firm’s ambition to strengthen its foothold around the world. In the U.S., the firm had $15.5 billion of retail mutual fund assets at the end of 1Q13, ranking #79 among all long-term mutual fund managers. While the opening of a New York office, the addition of a wholesaling team, the deal to purchase Artio, as well as the effort to raise brand awareness have revealed the firm’s strategic emphasis on the U.S., penetrating the highly competitive U.S. market remains challenging for overseas firms.

2) Vanguard Launches Emerging Markets Government Bond Index Fund
    Vanguard  |  5/14/2013

Because… The much-awaited fund is Vanguard’s first international fixed-income offering available to U.S. investors. The fund has expense ratios of 0.30% for institutional shares, 0.35% for Admiral and ETF shares, and 0.50% for Investor shares. Although these expense ratios compare favorably with funds in the same market segment, the caveat for investors is that “the fund will assess a purchase fee of 0.75% on all non-ETF shares to help offset the higher transaction costs associated with buying emerging markets bonds.”

3) Government Employees Postponing Retirement
    Plansponsor  |  5/15/2013

Because… Delaying retirement seems to provide a practical solution for seniors who look to boost their nest egg; however, not all people can stay on the job for as long as they wish. There are unforeseen circumstances that can derail a person’s plan, such as job elimination, health issues, and the need to take care of an elderly spouse. Financial firms should remind investors of the possibility of not being able to work past the traditional retirement age and encourage them to save aggressively and increase their plan contributions now so they won’t be faced with the possibility of needing to postpone retirement.

Total estimated inflows into long-term mutual funds were $12.39 billion for the week ended Wednesday, May 8, according to the Investment Company Institute (ICI). Although overall sales have remained in positive territory, this week's total broke the downward trend occurring since March 20 when inflows reached $12.38 billion. All broad asset classes experienced inflows with the exception of Municipal Bond, which experienced $263 million in redemptions. Taxable Bond led sales with approximately $7.7 billion in net inflows followed in a distant second by World Equity’s $3.1 billion intake. Hybrid funds gathered $1.5 billion, which is on par with its overall sales throughout the year with the exception of last week’s record $6.5 billion intake. Domestic Equity managed to reverse its outflows from the prior week by gathering $378 million in net inflows.


Source: Investment Company Institute

1) European ETP Assets Set to More than Double by 2017, Says iShares
    Fundweb  |  4/26/2013

Because… iShares’ optimism may lead more foreign ETP managers to compete in the European market, which has lagged behind its U.S. counterpart in both size and product sophistication. U.S.-listed ETPs accounted for 71% of global ETP assets at the end of April, whereas European ETPs represented only 18% of the global total. This year through the end of April, European ETPs raised $6.7 billion of assets, compared to the $65.6 billion absorbed by U.S. ETPs.  iShares dominates the European market with a 40% share, but other leading ETF providers in the U.S., including SSgA and Vanguard, have not established a significant presence in the region.

2) Mutual Fund Boutiques Find Success, Challenges
    On Wall Street  |  4/29/2013

Because… For small investment boutiques, the expertise of managing money does not always translate into the success of gathering assets. Although many research studies have proved the outperformance of small money managers, these entrepreneurial firms face daunting hurdles in raising assets due to their unknown brands and lack of marketing resources. While smaller managers need to maintain their focus on delivering value to shareholders regardless of market conditions, it is more important for them to identify distribution partners and get their funds onto different platforms in order to broaden their reach to the investing public.

3) Nationwide Financial Adds Four New Managed Volatility Funds to Core VA Line-Up to Help Investors Address the "New Normal"
    Nationwide  |  5/1/2013

Because… Offering managed volatility funds has become an emerging trend in the variable annuity (VA) world. Besides Nationwide, asset managers such as BlackRock, Calvert, and Fidelity have also introduced managed volatility funds for their VA products this year. As insurance companies are increasingly focusing on risk management, the target volatility asset allocation strategy is considered an effective tool that can benefit both investors and insurers. In particular, volatility management limits exposure to tail risks and lowers the cost of VA guarantees, making it a valuable solution for insurance carriers.

Total estimated inflows into long-term mutual funds were $3.07 billion for the week ended Wednesday, May 1, according to the Investment Company Institute (ICI). This cumulative total represents the lowest sales intake since the first week of January when sales were in the red. Equity funds contributed to the drag, with Domestic Equity experiencing nearly $4.1 billion in redemptions and World Equity posting $319 million in net outflows. Taxable Bond only managed to gather a mere $888 million in net inflows while its Municipal counterpart took in a paltry $73 million. Meanwhile, Hybrid funds led sales with a record $6.5 billion in net inflows, indicating investors were not willing to bet on either stocks or bonds.


Source: Investment Company Institute

Total estimated inflows into long-term mutual funds were $8.42 billion for the week ended Wednesday, April 24, according to the Investment Company Institute (ICI). This cumulative intake represents a 55% increase from last week’s total of $5.44 billion. All broad assets classes garnered inflows with the exception of Domestic Equity, which fell into the red by $608 million. World Equity collected $1.9 billion, pulling overall stock funds into positive territory. Taxable Bond led sales with $5.6 billion, while its Municipal counterpart only managed to collect $133 million in net inflows. Hybrid funds gathered nearly $1.4 billion, on par with last week’s total which was restated from $246 million in net outflows to $1.3 billion in net inflows.


Source: Investment Company Institute

Total estimated inflows into long-term mutual funds were $3.66 billion for the week ended Wednesday, April 17, according to the Investment Company Institute (ICI). Dropping 21% from last week’s intake, sales have been on a downward trend since the week ended March 20 when inflows reached $12.38 billion. Hybrid funds, which have been garnering steady inflows throughout the year, fell into the red with $246 million in net outflows. Municipal Bond led outflows with $698 million, while Taxable Bond led sales by gathering $2.2 billion—its third lowest total to date this year. With $1.7 billion in net inflows, Domestic Equity experienced its best week since January 30. On the other hand, World Equity managed to collect $645 million, but this represents its lowest intake since the week ended January 2.


Source: Investment Company Institute

1) CIBC to Acquire Atlantic Trust Private Wealth Management
    Invesco  |  4/11/2013

Because… Just as other asset management firms are wooing private wealth business, Invesco is offloading Atlantic Trust to concentrate more on growing its retail and institutional assets. Considered a non-core business by Invesco, Atlantic Trust will help CIBC break into the U.S. private wealth market. With its nationwide presence, strong investment results, high quality client service, and powerful brand, Atlantic Trust can be a valuable addition to Canadian-based CIBC.

2) Designing a Better DC Investment Menu
    Plansponsor  |  4/18/2013

Because… The white paper, authored by several industry experts, recommends tiered investment structures for DC plan menus. Such tiers can be effective because they take participant behavior profiles into consideration. Plan sponsors traditionally offer the same investment options to all their plan participants, but they need to recognize different levels of participant involvement. A tiered structure gives self-directed investors more choices while simplifying the decision-making process for unsophisticated participants.

3) SEI Study: Active Exchange Traded Funds Will Help Fuel Sector's Next Growth Phase
    SEI  |  4/22/2013

Because… We concur that actively managed ETFs will drive growth and innovation in the ETF evolution. Quite a few asset managers have received regulatory approval for launching active ETFs. With the success of PIMCO Total Return ETF and the SEC’s permission to use derivatives, we expect more active ETFs to be brought to the market in the next couple of years, especially in the fixed-income space.

Total estimated inflows into long-term mutual funds were $4.83 billion for the week ended Wednesday, April 10, according to the Investment Company Institute (ICI). This total marks the lowest intake since the first week of 2013, when net flows fell into negative territory, and a dramatic decrease from the high of $26.6 billion during the week ended January 9. Despite generating nearly half of the cumulative sales, Taxable Bond only gathered $2.7 billion compared with $6.4 billion during the prior week. Falling into the red for the third time this year, Municipal Bond experienced net outflows of $857 million. On the other hand, World Equity gathered $1.2 billion, and its domestic counterpart collected $405 million—a reversal from net outflows of $1.8 billion during the prior week. Representing a 19% increase from the prior week, investors put nearly $1.4 billion into Hybrid funds.


Source: Investment Company Institute