Portfolio

2011 was a tumultuous year, one that left most industry executives deeply uncertain about the future. The following predictions are meant to provide the industry with 10 key insights that should help clarify some of these uncertainties.

Hedge funds will take in record net new assets in 2012, predicts consultancy Agecroft Partners, based on interviews with more than 2,000 institutional investors. In 2011, hedge funds took in $67 billion, to reach $1.72 trillion.

The best-performing mutual funds of 2011 invested in large-cap, dividend-paying stocks—putting utility, real estate investment trust, healthcare and consumer staple funds at the top of the heap.

Granite Investment Advisors is set to launch its first retail mutual fund this week, the Granite Value Fund.

There is strength in numbers, and practices across the country are banking on size to position themselves for success.

You never know what to expect. But events of 2011 gave plenty of clues for what lies ahead in 2012, as trading firms and exchanges speed up and beef up.

A 10-year low of new municipal bond issuance is what was on everyone’s mind in 2011. Last year, only $295 billion of tax-exempt bonds were issued, down almost 32% from 2010 when $433 billion was issued. It was the lowest amount of issuance since 2001.

Volatility, the fear of a second worldwide recession, continued aversion to equity funds and uncertainty over Dodd-Frank regulatory fallout-all headlined 2011.

Financial advisers will remember 2011 as "The Year of Volatility" or "The Year of Uncertainty," according to a survey of 200 financial advisers polled by the SEI Advisor Network.

As a client takes distributions, a money manager ultimately becomes more important than asset allocation as the sequence and volatility of market returns rises.