October 29, 2012
--- Passive
exposure will grow to 37% of adviser-managed holdings by 2020, research found. ---
In
2011, passively managed funds accounted for 20% of mutual fund and exchange-traded fund (ETF) exposure, according to Tyler Cloherty, senior analyst at Cerulli
Associates.
The firm’s
most recent report, “The
Cerulli Edge-Advisor Edition, 4Q Issue,” alternatives
and emerging markets are the latest sleeves within many adviser portfolios, a
trend driven by the opportunity for diversification benefits and growth
opportunities. Many advisers indicate they use passive and active managers as
complements to one another.
Advisers
are favoring passive options, with sector allocations receiving the largest new
flows, the firm said. “There is a transition toward lower index options as
advisers are seeking to regain control over their clients' portfolios,” Cloherty
said. “ETFs and passive investments synced well with adviser demand due to
their low cost, liquidity and ease of trading.
Cloherty
said the firm expects active managers to continue to retain significant share
within adviser portfolios. “Nearly 50% of advisers still believe that active
managers can consistently outperform,” he said. “There is an opportunity
for asset managers to compete where new money is going by positioning
themselves within growth markets.”
Jill Cornfield