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Director of U.S. Research

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Presentation on theme: "Director of U.S. Research"— Presentation transcript:

1 Director of U.S. Research
Mutual Funds: Looking Ahead Avi Nachmany Director of U.S. Research Strategic Insight 1

2 Q1: What Will Happen with $10 Trillion in Cash?

3 Q2: Bond Fund Demand in 2013, 2014, 2015 and Beyond?

4 Q3: Will Global, Tactical AA Continue to Lead Demand
Q3: Will Global, Tactical AA Continue to Lead Demand? Further Refinements of Balanced Global Investing?

5 Q4: Equity Fund Sales: ‘2H’12, 2013-14
Q4: Equity Fund Sales: ‘2H’12, ? Beyond Focus on Asset Allocation Solutions, Dividend Income?

6 Q5: Emerging Market Investing: Already Matured beyond Just Episodic, to Strategic and Core?
Assets, $B Net New Flows, $B Objective Name (SI) 04/12 2008 2009 2010 2011 YTD-04/12 Emerging Markets, Regional, and Sector Funds Int'l Emerging Market Equity 316.5 6.5 33.3 56.5 19.0 21.2 Global Equity Sector 63.0 0.9 4.2 3.8 6.0 1.0 Pacific Equity without Japan 27.0 (3.5) 4.9 3.9 (4.2) 0.7 Int'l European Equity 16.2 (2.9) (0.6) (2.4) (1.2) 0.2 Pacific Equity with Japan 9.5 (0.1) 2.1 0.5 0.1 Int'l Latin America Equity 9.4 (0.8) 2.0 (1.3) (3.2) Int'l China Equity 18.1 0.4 (2.7) (2.3) Int'l Japanese Equity 8.8 (1.4) (1.0) 2.6 Int'l Single Country Equity 50.7 (3.0) 11.1 8.7 (1.1) Total 519.2 (3.8) 58.2 67.5 16.0 21.9 Source: Strategic Insight Simfund MF

7 Q6: Will Relative Risk-Adjusted Returns Remain Key Screening Criteria for Traditional Diversified Funds? (e.g., 1Q12 Flows vs. Trailing 3-Yr Risk-Return Relative Scores, SC/MC*) *Mid / Small Cap Stock actively-managed Funds; Relative risk and return rankings measured within each fund’s Morningstar categories; bubble size corresponds to 1Q’12 net flows. The funds in the charts clearly share appealing risk-return characteristics for the 36 months ending March 2012.

8 Q7: Search for Alternative, Lower Down-Side Risk Ways to Invest - Cyclical or Secular? (Data below exc. ETPs)

9 Q8: Can New ETFs Concepts Bridge Successfully the Opportunity Gap of Index and True Active Management?

10 Q9: Equilibrium Forces in 3-5 Years
Q9: Equilibrium Forces in 3-5 Years? Distribution of Actively Managed Funds Expand Fastest Where? +9% % Change -1.5% +1.0% -0.7% +0.7% Source: SI Fund Sales Survey 10

11 Q10: Share of FA Distribution with Point-Of-Sale Compensation in 2015?
Source: Coates Analytics Distribution Management System / SI Analysis *Note: Reflective of data from national broker dealer firms with both commission based and wrap platform data captured in Coates Analytics Distribution Management System. 11

12 Q11: More of the Same in Coming Years, or a Reversal?
Source: Coates Analytics Distribution Management System / SI Analysis

13 Q12: Fund Asset Velocity in Discretionary Accounts Alarming to Investment Managers, Some Distributors Source: Coates Analytics Distribution Management System / ICI / SI Analysis

14 Q13: What % of FA Sales in Y-Share Class in 2014?
Source: SI Fund Sales Survey

15 Q14: Daddy, What is 12b-1? Source: SI Fund Sales Survey

16 Q15: Another New Normal in a No Load World Ahead: Opportunities?
Re-Invent “direct to the investors” distribution? Increasingly, our personal footprint on the internet helps identify a bias around “self directing,” “validating,” and “delegating,” and how best to communicate with each person for maximum engagement. Also, a revised map of “influentials” with mutual fund distribution “klout” Use such understanding to invigorate existing portals for “direct to investors?” Or new portals (Amazon, Google, Facebook, eHarmony?)

17 © Copyright 2012 Strategic Insight, an Asset International company, and when referenced or sourced Morningstar Inc., Lipper Inc. and Coates Analytics. All rights reserved. The information, data, analyses and opinions contained herein (a) include confidential and proprietary information of the aforementioned companies, (b) are provided solely for information purposes, and (c) are not warranted or represented to be correct, complete, accurate, or timely. Past performance is no guarantee of future results. The aforementioned companies are not affiliated with each other. This report has been prepared using information and sources we believe to be reliable; however, we make no representation as to its accuracy, adequacy or completeness, nor do we assume responsibility for any errors or omissions or for any results obtained from the use of this report, including any action taken with respect to securities referred to in this report. Our employees may from time to time acquire, hold or sell a position in securities mentioned herein. We may from time to time perform services for any company mentioned in this report. This report is not a prospectus or representation intended to use in the purchase or sale of any securities mentioned in this report. Strategic Insight is available by subscription and by single copy upon request to the publisher. 17 17

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