Insight November 2009 Monthly Update

The November Insight research feature reprises our annual tradition of examining the sales and retention patterns of the funds industry,tracking the year’s leaders in different asset classes and product structures. The Trend Lines article scrutinizes the segregated funds arena. Fixed income funds took centre stage during 2009, as the flight to safety that catapulted money market funds to the best-selling categories came to an end, fuelled by zero yields on short-term instruments. The investors’ and advisors’ enthusiasm for income has been greeted by the rapid development and repositioning of existing fixed income products, leading to a slew of new and more specialized mandates. The recent couple of years have likely witnessed more mandate specialization, innovation and launch activity in the fixed income investment funds arena (including closed-end funds and ETFs) than the previous 10 years combined. Meanwhile, the ultimately cautious return to equity funds by investors and advisors is likely to be greeted by fund companies with a more “back to basics” type of message, with fund managers focusing on explaining—and sticking to—their investment philosophy in an effort to reaffirm their value-added and regain the trust eroded by the recent bear market.