The Markets October 31, 2008

Funds See September Asset Drop

The combined assets of the nation's mutual funds fell 8.3% or $959 billion to $10.6 trillion in September, according to Investment Company Institute (ICI) data.
Reported by

An ICI news release said long-term funds—stock, bond, and hybrid funds—had a net September outflow of $63.5 billion versus an August outflow of $12.1 billion.

Meanwhile, stock funds posted an outflow of $56.2 billion in September, compared with an outflow of $19.7 billion in August. Among stock funds, world equity funds posted an outflow of $22.4 billion in September, while funds that invest primarily in the U.S. had an outflow of $33.6 billion.

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Hybrid funds posted an outflow of $6.49 billion in September, compared to an outflow of $302 million in August.

Bond funds had an outflow of $898 million for the month, compared with an inflow of $7.87 billion in August. Taxable bond funds had an outflow of $274 million and Municipal bond funds had an outflow of $624 million.

Money market funds had an outflow of $145.2 billion in September, compared with an inflow of $28.4 billion in August.

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The Markets October 31, 2008

Managed Account Assets at $1.8T

Total managed accounts assets reached $1.85 trillion through the first half of 2008, according to the annual report “Cerulli Quantitative Update: Managed Accounts 2008.″
Reported by

Of the five fee-based programs that make up the managed account universe, mutual fund advisory programs experienced one of the sharpest market share hikes at 27% over the past five years, while separate accounts experienced the most pronounced drop-off at nearly 12%.

According to Cerulli, growth rates for separate account consultant programs—the largest segment of the industry—have been impacted more than other managed account segments because of the recent market volatility, which has lead to more conservative projections by Cerulli analysts compared to previous years.

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These programs are expected to hold nearly $874 billion in total AUM by year-end 2012.

Growing an average above 26% a year since 2003, mutual fund advisory programs generally outpace the growth in the long-term mutual fund market and are one of the primary drivers to the overall success of managed accounts, according to Cerulli.

“We expect further growth in this important managed account segment as advisers, investors, and sponsors continue to embrace the benefits of embedded advice, built-in portfolio diversification, and asset-based fees,” says report coauthor Emily Tillman.

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