To retain assets in what is expected to be a continued flat market, mutual fund companies must continue to diversify investment options to include hedge funds, exchange-related funds, private equity, funds-of-funds and even real estate, according to Deloitte & Touche's Global Financial Services Industry Outlook. As well, these have become accepted assets in many portfolios, the report noted.

"Once, having a sold lineup of mutual funds was enough, but investment management firms will need to be prepared to offer investors a wider variety of investment options if they are to retain their assets," the report said. At the same time, however, firms will likely cut back on the number of mutual funds they offer, limiting them to those with the best performance and largest assets.

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