Mutual fund assets experienced a slight 0.9 per cent dip in March, ending the month at USD12.3 trillion. Flows continue to be a bright spot for mutual funds, as they outpaced ETFs for the third straight month, taking in USD29.6 billion.
According to Cerulli Associates, ETF assets ended March approaching USD2.1 trillion. Asset growth from February was a modest 0.1 per cent, as healthy monthly flows of USD26.8 billion were offset by sub-par market returns.
As investors prepare their portfolios for rising interest rates, they are allocating to and considering investing in nontraditional fixed-income strategies that aim to improve risk-adjusted returns, while protecting their portfolios from interest rate risk.
According to Cerulli's survey of product executives, nearly 80 per cent revealed that the need for income drives innovation for the retail channel and 26 per cent for the institutional channel. In lockstep with product executives, 90 per cent of financial advisors also report that the demand for income is highly or somewhat influential in driving their portfolio construction decisions.
