From positive outlooks for ETFs to asset managers in Asia gaining a greater portion of pay from net sales, here's top news impacting mutual fund and ETF managers and providers.
INDUSTRY HIGHLIGHTS
Cerulli Projects Spike in Target-Date Strategies
Target-date strategies will capture 63.4% of 401(k) contributions in 2018, new research from global analytics firm Cerulli Associates predicts.
"Plan sponsors, consultants and advisors have increased their focus on target-date decisions as plan assets allocated to target-date funds have increased," comments Bing Waldert, director at Cerulli. "The leaders among target-date providers have not changed during the past three years, but below the top tier, some asset managers have demonstrated the ability to grow their target-date assets."
Report Finds e-FX Growth Driven by North America, Retail Aggregators
Almost three-quarters of global foreign exchange trading volumes (74%) were executed through electronic systems last year, up from 71% in 2012, according to a new report from Greenwich Associates that analyzes trends in non-interbank, client-generated FX trading volumes.
Geographically, the world's largest and arguably most mature FX market, Continental Europe, was the only region to notch a meaningful decline in the share of foreign exchange volume executed electronically last year, as a modest increase in online volume failed to keep pace with a bigger jump in total FX trading volume and e-FX fell to a total 68% from 73%.
Usage in the United States was essentially unchanged at around 83% of market participants, but e-trading users made some dramatic increases to the share of their business routed through electronic systems. That shift pushed e-FX to 73% of total U.S. FX trading volume in 2013 from 63% in 2012.
RESEARCH
Survey Highlights Positive Outlook for ETFs
There have been increases in satisfaction for corporate bond, commodity, real estate and sector ETFs, but satisfaction rates for ETFs based on the most liquid ETF asset classes are far more consistent compared to those based on illiquid asset classes, according to a survey by the EDHEC-Risk Institute. The survey was conducted as part of the Amundi ETF & Indexing research chair at EDHEC-Risk Institute on "Core-Satellite and ETF Investment." Product development within certain asset classes has driven increases in ETF usage, notably within the Real Estate (5.8 % increase), Hedge Fund (14.8% increase) and Infrastructure (14.8% increase) asset classes.
Managers to Gain Software Enhances
Bonaire will provide revenue and management software to asset managers, mutual funds and capital markets firms that make up the Broadridge Financial Solutions, Inc. through its Software as a Service hosting environment, according to the company.
"We are pleased to bring our Bonaire revenue and expense management capabilities to the middle market on a managed basis," says Gerard Scavelli, president, mutual funds and retirement solutions group for Broadridge. "The deployment of this offering is the direct result of our ability to leverage Broadridge's extensive IT expertise and proven hosting environment."
According to a recent Bonaire client survey, 92% of respondents cited improvements in process and efficiency as a factor in choosing Bonaire for revenue and expense management solutions, the company says.
Compensation Based on Net Sales in Asia
Asset managers in Asia gain a greater portion of pay from net sales than their U.S. and European peers, according to information from Cerulli Associates. The report says that on average a U.S. salesperson in charge of wholesaling relationships will derive 40% of their pay from gross sales commission and 17% from net sales while European mangers place equal importance on tracking net and gross sales for compensation. In Asia, however, 60% of managers track net sales for compensation.
"Measuring success is a nebulous and imprecise task because of the number of factors involved in clinching a sale. However, managers are becoming more inventive and resourceful in nailing down each department's contribution," says Yoon Ng, director of Asia research at Cerulli. "Advances in digital media make tracking easier, but at the end of the day, hit rates and email responses do not translate to business."
PRODUCTS
New FundFocuses on Global Equity Markets
The new Catalyst Macro Strategy Fund (MCXAX), launched by Catalyst Funds, will make investments in a wide variety of asset classes with the goal of capital appreciation to achieve positive returns in all market conditions, according to the company.
"We are thrilled to announce the launch of the Catalyst Macro Strategy Fund," says Jerry Szilagyi, CEO of Catalyst Funds. "As a macro fund, MCXAX brings together many of Catalyst's successful investing approaches which we believe is a recipe for a winning strategy."
MCXAX's investments will tactically allocate among securities using both fundamental and technical analysis, focusing mainly on investments within the global equity markets, says Catalyst Funds.
IndexIQ Fund Turns 5 Years Old
The IQ Hedge Multi-Strategy Tracker ETF (QAI) turned five years old on March 25th and now holds more than $690 million in assets according to IndexIQ, the company that sponsors the fund. The fund seeks to track the performance of the IQ Hedge Multi-Strategy Index.
"Since we launched QAI, we have seen many new competitors enter the market for alternatives with both 40-Act mutual funds and ETFs," says Adam Patti, chief executive officer at IndexIQ. "This has included some of the biggest and best known names in the investment world, many of whom have struggled to find a foothold in the space.
At the same time, QAI has continued to grow, bringing in new assets and investors."
STAR Awards Is Accepting Entries
Entries are now being accepted for the mutual fund industry's 18th annual STAR Awards competition, recognizing excellence in marketing and communications, according to Mutual Fund Education Alliance (MFEA).
The awards recognize the best of the best among fund firms for outstanding efforts in three main areas: retail, advisor and retirement.
This year MFEA has announced that there will be an expansion in the retirement segment, in which entries designed for plan participants as well as plan sponsors with categories for digital marketing through leadership and white paper and combinations programs designed for events and conferences.
DEPARTURE
Investment Organization Heads to Florida
Deutsche Asset & Wealth Management is expanding to Fort Lauderdale, Fla., the company announced. The company also says that it purchased two towers, located at 350 and 450 East Las Olas Blvd., offering 468,000-sqaure-feet of office and retail space in the central business district.
"We believe Las Olas Centre is the premier office asset in the market with exceptional amenities including its retail tenancy," says Todd Henderson, head of retail estate, Americas, at Deutsche Asset & Wealth Management. "Our view is that the buildings' improvements and central location in the Fort Lauderdale CBD will continue to attract top tier tenants at market leading rents - positioning the property to deliver strong long term returns for our client."
STATISTICS
60% of the average Vanguard 401(k) participant's account balance is invested in index funds.
Source: Vanguard
$3.8B in flows went to alternative mutual funds in 2013.
Source: Cerulli Associates
