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Advisors to increase allocations to actively managed non-US equity funds

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Over the next six months, 34 per cent of financial advisers will be increasing their allocations to actively managed non-US equity funds by more than 3 per cent, according to a survey by Advisor Perspectives.

“Given that P/E multiples are lower in emerging and developed non-US markets than they are in the US, this is not surprising,” says Robert Huebscher, CEO of Advisor Perspectives. “But fund companies should take note of the interest in actively managed funds, which may signal a reverse in the recent trend of asset flows from active to passive.”
 
The second highest category was traditional index funds, to which 30.4 per cent of advisors plan to increase allocations. That was considerably higher than the 22.4 per cent of advisors who plan to increase their allocations to non-cap weighted (smart-beta) funds.
 
The least popular asset class was high-yield bond funds, to which only 6.1 per cent of advisors plan to increase allocations. Among the responses to the “other” category were advisors who plan to increase their allocations to individual securities, such as municipal bonds.
 
“Analysis of the fund industry has been focused on dissecting trends in the historical flows of assets,” Huebscher says. “We believe fund companies are more interested in what advisors plan to do rather than what they have already done, and we are responding to that need.”
 
Advisor Perspectives provides sponsors of its online community, APViewpoint, a detailed analysis of the results, including a breakdown of responses by size and type of advisor. This survey will be conducted quarterly. APViewpoint sponsors can conduct online focus groups with advisors, such as those indicating they plan to increase allocations to a specific asset class or type of product.

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