As the historically burgeoning mutual fund market cools, the sub-advised sector of the industry is beginning to explode, according to a new survey released today.
Sub-advised mutual fund assets grew an average of 27.4% per year between 1995 and 2000, or 8.9% more than internally managed funds, according to the study, conducted by the
In addition, large fund families outsourced management of some of their internally managed products last year, creating $11.1 billion in new assets for the sub-advised mutual fund sector, the study shows.
The increased attention to sub-advised products may be due in part to market volatility during the past 14 months, which has prompted investors to put a premium on specialized management and demand better relative returns, the FRC says.
Net sales in sub-advised funds declined less than 1% last year, attracting $32.8 billion in net sales. And, while internally managed assets for long-term funds dropped by 2.9% last year, assets in sub-advised funds grew 9.1%.
