That is a huge reversal from the last five years. From the start of 2008 through the end of 2012, equity funds lost $533.3 billion of assets, according to the Investment Company Institute.
Now is the time for fund operators to take the lead on convincing mainstream investors to put even more money into equity funds.
At least, that's the opinion of Fidelity Investments, which two weeks ago began a multimedia campaign designed to give the advisors who sell its actively managed mutual funds ample intellectual ammunition to help their clients make the move.
"We're pretty much putting our foot on the gas in elevating our message on equity in the marketplace with our advisors,'' said Carey Hoch, senior vice president, Fidelity Financial Advisor Solutions.
The second largest purveyor of mutual funds started sending emails out to advisors in its campaign, the week beginning February 18. A direct mail campaign started February 25. An online advertising campaign, targeted solely at advisors, starts March 11.
''My sense is from the beginning of March to the end of May, it's going to be pretty hard for an advisor to not see a message from Fidelity,'' said Hoch.
The numbers back her up. Over the next eight weeks, somewhere between 1.3 million and 1.4 million email messages will get sent. Six direct mail pieces will reach more than 500,000 advisors. And the electronic advertising campaign is set to deliver 10 million impressions, over its three-month run, on Web pages belonging to Morningstar.com, Yahoo! Finance, Advisor Perspectives and Financial Advisor.
The blanket marketing is somewhat ironic, Hoch said. Because, before the dotcom bubble burst in 2001 and 2002, investors were almost exclusively interested in stocks and equity funds.
"It's funny that you have to come to a conversation about encouraging people into equities,'' said Hoch. "It's almost like a replay from encouraging people to diversify into fixed income 10 years ago."
Last fall, however, Fidelity began its campaign by releasing a white paper that argued three fundamental sectors of the U.S. economy were again healthy and surging: energy, housing and manufacturing.
Companies in the Standard & Poor's 500 have seen their earnings grow at a 5% annually compounded rate since 2000, even when the economy has been weak, argue Fidelity senior vice president of asset allocation research Dirk Hofschire and director of asset allocation research Lisa Emsbo-Mattingly. And even if that economy only grows 2% a year, instead of the 3% of the last 60 years, profits from abroad and higher productivity should produce total returns greater than the rate of growth in the Gross Domestic Product, they say.
"We know that diversification is important and seven, eight, nine years ago, (the) focus was on increasing the assets allocated to fixed income," Hoch said.
Now, advisors' clients are "not as exposed to equities as they should be and we need to encourage them to diversify back in,'' she said.
Getting investors to move back has been hampered by the raw memories of the financial crisis of 2008, which shaved as much as 40% off the invested savings of large numbers of Americans.
"People got disenchanted and disenfranchised and went into more fixed income products,'' she said. Indeed, from 2008 to 2012, investors put $1.1 trillion into bond funds-twice what they pulled out of equity funds, by the ICI count.
"People were looking for safety. It made sense for the times,'' she said. "But the (stock) market is strong, now. The market is doing well.''
The company is creating a landing page for the campaign, which anyone can view. The company is also at work on a "thought leadership" site where investors can see Fidelity analyses, videos, and charts that lay out its opinions on a wide range of investable assets, not just stocks or bonds.
The point, Hoch says: To talk about asset classes that should be part of an overall strategy, not just an out-of-favor type of investment.
The equity campaign will focus only on helping advisors get their clients to move more assets into Fidelity's actively managed mutual funds. This is because that is what Fidelity's advisors are empowered to sell. Exchange-traded funds that invest in stocks are handled through Fidelity's brokerage arm.
