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?)

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