Boutique Fund Managers See Growth in Down Economy

A listing of the fastest-growing active fund managers in 2009 includes mostly smaller firms.

Strategic Insight (SI), an Asset International company, looked at active fund managers (among those that started 2009 with $1 billion or more in assets) that saw large growth in terms of 2009 net inflows as a percentage of total assets at the start of 2009 (organic growth), and found 15 firms that had organic growth of 50% or more in 2009.

The top five included Van Eck (119% organic growth), Manning & Napier Advisors (91%), Matthews Asian Funds (83%), Robert W Baird & Co (72%), and Hussman Econometrics (68%).

“The large number of smaller fund firms on this list attest to the strength of boutiques, whose focus and strong sense of conviction for their strategies/philosophies often prove attractive to investors in times of uncertainty,” said Avi Nachmany, director of research at Strategic Insight, in a press release.

Completing the list of the top 15 are:

  • Saturna Capital (67%)
  • Credit Suisse (66%)
  • Bessemer Trust (65%)
  • Lazard Asset Management (65%)
  • Sentinel Asset Management (63%)
  • Westchester Capital (61%)
  • TCW Management (57%)
  • Northern Trust (54%)
  • Kornitzer Capital Management (51%)
  • JPMorgan Funds (51%).

SI also noted the most popular actively managed mutual funds of 2009 displayed a wide range of investment styles. PIMCO Commodity Real Return topped the list of domestic equity funds with 6.7 billion in inflows; PIMCO Total Return led taxable bond funds with $49.7 billion; Ivy Asset Strategy saw the biggest inflows of international equity funds ($6.5 billion); and Wells Fargo Advisors Ultra Short Muni topped the list of tax-free bond funds with $6 billion in inflows.

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More information is available at www.sionline.com.

Bond Funds See Record Inflows in 2009

U.S. investors’ use of bond mutual funds reached record levels in 2009.

Strategic Insight (SI), an Asset International company, announced that full-year 2009 inflows to bond funds (including traditional mutual funds and ETFs) hit an all-time record of $396 billion—an impressive number considering bond and stock fund flows have never before topped $300 billion in one year. If funds underlying variable annuities are included, bond fund inflows hit $425 billion in 2009, according to SI.

Stock fund flows, when excluding emerging markets, were only around $30 billion, which SI said demonstrated that while spiking stock prices worldwide are signaling economic recovery, investors in stock mutual funds remain cautious and ambivalent about the recovery. Emerging markets funds (diversified or single country) captured about $55 billion during 2009.

Altogether, long-term mutual funds (stock and bond funds and ETFs) saw total net inflows of $478 billion in 2009, led by taxable bond funds (net inflows of $324 billion) and international equity funds (net inflows of $75 billion). SI said a limited appetite for risk restrained demand for U.S. equity funds in 2009, resulting in net inflows of just $6 billion.

ETFs (including ETNs) saw net inflows of $114 billion in 2009, down from $176 billion in 2008, but more than twice that of traditional index fund flows, at $54 billion, up from $50 billion in 2008.

The average investor in stock funds earned a 33.6% return in 2009, while the average bond fund investor earned 16.9%. According to SI, those figures are asset-weighted, thus reflecting the experience of the average investor, not the “average fund.”

Stock and bond mutual funds (including ETFs but excluding variable annuity funds) ended the year with $7.8 trillion in assets.


More information is available at www.sionline.com.

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