There have been 103 ETFs launched thus far in the first half of 2014 as of June 30 compared to 157 for all of 2013. A total of 902 new mutual funds by share class have been launched in the first half of 2014 compared to 2,083 for all of 2013.
Based on estimated net flows as of July 2 for funds launched this year, Lipper has put together the top mutual funds and ETFs. From leveraging vast advisor networks to working with external and internal wholesalers, we've selected a few marketing and operational takeaways for providers based on Lipper's assessment. Here are some takeaways from Barry Fennell, a research analyst at Lipper.
* The GMO Debt Opportunities Fund is being used by Wells Fargo as part of an asset allocation fund which consists of only GMO funds. GMO is able to use its established brand in the investment industry to allow the large advisor network of Wells Fargo to distribute the Wells Fargo Asset Allocation Fund and thus increase GMO's assets under management and revenue stream. GMO has a similar arrangement in place with John Hancock with other GMO products. It is a smart strategy from GMO's perspective as they avoid the cost of maintaining and developing a large distribution/sales team/effort while still leveraging their reputation at managing money. It allows for the economies of scale expense savings achieved with a 1940 Act mutual fund structure to accrue to GMO without much of the operational expenses that usually accompanies it such as print advertising, prospecting and general mailings.
* The KP Large Cap Equity Fund was created exclusively for the KP Retirement Path Funds. "This will certainly help to keep operations and shareholder costs low and make for an easier operations setup/maintenance as the shareholders will largely be enrolling via the web and receiving statements that way," Fennell says. Pertinent customer data such as home mailing address and tax identification numbers can easily be loaded from existing employer databases thus streamlining the enrollment process. It also allows the fund to be used in different asset allocation/balanced funds in the future. These type of fund structures will likely proliferate in the future as they allow for ease of inclusion into asset allocations programs and models.
* The JP Morgan Mid Cap Equity Fund has been able to take advantage of JP Morgan's established advisor network and the reach of its wholesalers and relationship professionals to bring the fund share class to the attention of potential investors quickly and proactively. Giving notice to potential shareholders in advance of the fund's launch and proactively reaching out to client's to address any potential questions on investment philosophy, approach and pricing will be a significant advantage in bolstering the asset gathering potential of this offering in a fairly crowded segment of the fund space.