Seventy percent of retail asset managers consider alternative products to be as important as or more important than other initiatives, according to a new survey by Cerulli Associates.
“To meet the demand for alternative investments packaged for retail investors, asset managers have more than doubled the number of strategies across open-end mutual funds, closed-end funds, ETFs, and ETNs (from 430 products in 2007 to 1,019 by 2011),” according to Cindy Zarker, director at Cerulli Associates. “Each one of these vehicles offers unique strengths and considerations, and some are better suited to certain investment strategies, investor segments, and account types.”
Other findings in Cerulli’s research include:
- On average, asset managers report focusing 42% of their product development on alternative strategy mutual funds or ETFs, while only 13% are focused on developing these strategies in other vehicles.
- As of year-end 2011, $41 billion, or 19% of alternative mutual fund assets were subadvised by unaffiliated manager(s).