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Third-party distribution of long-term mutual fund and ETF assets up 23 per cent


Total third-party long-term mutual fund and exchange-traded fund (ETF) assets under management (AUM) increased 23 per cent in 2013 to USD8.8trn from USD7.1trn in 2012.

That is according to figures released by Access Data, a Broadridge Financial Solutions company.
Broadridge's Fund Distribution Intelligence tool reveals that the independent channels – independent broker-dealers (IBDs) and registered investment advisers (RIAs) – are the largest distribution channels for long-term mutual funds and ETFs.
Specifically, 2013 data shows:
• IBDs led in overall third-party distribution of long-term mutual funds and ETFs with USD2.05trn AUM, a 23 per cent increase over the previous year
• The second largest channel was RIAs with USD1.62trn in fund and ETF AUM (a 17 per cent increase over 2012), followed by the wirehouse channel with USD1.59trn
• Total AUM for retail third-party distribution of long-term funds and ETFs represents USD5.7trn, or 65 per cent of all third-party distribution
The institutional channels – private banks, national banks and trust companies – had combined AUM of USD3.1trn, or 35 per cent of third-party distribution
The overall growth of the IBD channel, which has ranked number one in AUM versus all other distribution channels consistently from 2011 to 2013, is driven by long-term mutual funds with an increase in AUM of 24 per cent in 2013. This compares to an increase in long-term mutual funds for the RIA and wirehouse channel during 2013 of 13 per cent and 14.6 percent, respectively.
Within the RIA channel ETFs are driving growth as demonstrated by a 33 per cent increase in 2013. ETF assets for the RIA channel also outpaced the IBD and wirehouse channels in 2013, which experienced an increase in ETF assets of 18 per cent and 25 per cent, respectively.
"The independent retail channels continued on a strong growth path in 2013 and we expect IBDs and RIAs to remain the leading distribution channels of long-term mutual funds and ETFs in 2014. The data we gather shows that long-term funds are driving growth for IBDs, but ETFs gained a larger share of RIA asset growth in 2013," says Frank Polefrone, senior vice president, Access Data, Broadridge. "We're working closely with our clients to help them understand which channels are driving the most growth and why, which provides them with insights by specific distributor including RIAs and IBDs making up the independent distribution channels. As a result, they have the market intelligence needed to effectively target emerging distributors and capitalise on growth opportunities in the market."

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