ING, Fidelity Funds Gain Favor with Affluent

Affluent retail investors are pulling assets away from traditional mutual funds in favor of exchange-traded funds and other alternatives, resulting in significant market consolidation, according to new findings by Cogent Research.

But it’s not all bad news for some fund firms.

According to Cogent, 71% percent of affluent Americans with at least $100,000 in investable assets now own mutual funds, compared to 75% at the end of 2010.

Additionally, the share of total investor assets that mutual funds represent has declined, from 33% in 2010 to 26% at the end of 2011. With fewer dollars allocated to mutual funds, the average number of fund providers that investors tap has declined from 1.9 per investor to 1.56.

However, Cogent’s findings also reveal that four fund providers -- Schwab/Laudus Funds, J. P. Morgan Funds, ING Funds and Fidelity Advisor Funds -- managed to increase overall market penetration and improve the percentage of their customers who consider them to be their primary provider of funds to invest in.

"Investors are using fewer providers but not necessarily fewer funds," John Meunier, Cogent Research Principal and author of the 2012 Investor Brandscape report, told Money Management Executive. "The important driver of loyalty among investors is the broad range of products available in fund families."

The findings also show that for nearly all of the 34 leading mutual fund companies, about a third of these firms experienced increases in the proportion of clients who now consider them to be their primary mutual fund provider -- that is, the firm receiving the largest share of their mutual fund dollars.

The findings are based on a survey of 4,000 affluent investors conducted form October 2011 to December 2011 and released earlier this month.

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