The July issue of Insight is the first of a two-part series on multi-series funds, reprising the topic we have covered since 2001. The research leverages our proprietary databanks, which currently include 7,300 fund/series combinations from 82 sponsors, as well as findings gleaned from interviews with industry executives. The focus of the current report is on measuring the asset base expansion of the various fund series and identifying the asset and growth leaders—both companies and funds—in each series sub-segment. The September issue of Insight will wrap up our multi-series coverage with a close look at fund series MERs, management fees and TERs, and their impact on overall fund industry MERs.
In the years leading to the 2008-2009 bear market, mutual fund companies filled their shelves with new series flavours at a record pace. Supporting this continued brisk development activity was a belief that a broad range of pricing and compensation options in the form of multiple series of funds—in short, added flexibility—was a prerequisite for successful growth strategies targeting multiple delivery channels, the varied business models of advisors, and a wider range of investors. Today, while product versatility remains in vogue, fund companies have become cognizant of the need to strike a balance between the desire to offer a full shelf of fund options and managing costs. A further consideration is the fact that growth in select series, such as F (although growth in this series is gaining momentum), T, and the virtually invisible High Net Worth series, has largely failed to live up to the original exalted expectations.
By tracking the progress of individual fund series, the research provides fund industry participants and providers thereto with important insights into the sea-change in the fund industry delivery paradigm, the growing importance of institutional channels of delivery, and the associated impact on industry economics.