Insight May 2016

How much and by which mechanisms distributors of financial products (mutual funds, in particular) are compensated has been the subject of much global debate and regulatory action since the financial crisis of 2008. The May Insight article focuses on fund load options—one of the key components of the advisor compensation formula. The research looks under the hood of optional load funds to document which load types are popular (and not) with investors and advisors. Looking closely at the evolution of load versus no load funds in terms of assets, sales, redemptions and new money, along with the trends within the load category which are shaping the evolution of front-end, deferred sales charge (DSC) and low-load options, reveals a process of deeper change within the investment funds industry, one that represents a significant departure from the past. The Trendlines article looks at foreign versus domestic asset class preferences and the recent trajectory of the markets.