Cerulli Associates’ US Monthly Product Trends reveals that mutual funds closed the first half of 2023 on a positive note, growing 4.1 per cent to USD17.7 trillion. This is up nearly USD1 trillion from the February 2023 low of USD16.8 trillion.
Cerulli notes that the vehicle continues to suffer negative net flows as older investors draw down mutual fund holdings to fund their retirements, while new investments are diversified across other investment vehicles (e.g., ETFs, SMAs, CITs).
ETFs also ended the first half on a positive note, experiencing a higher relative growth in assets during June (5.1 per cent) to reach USD7.3 trillion in total assets, Cerulli says. Investor demand for ETFs continues to present itself within net flow data as the vehicle added more than USD70 billion in positive net flows during June.
Significant differences exist between how segments within the affluent investor market make investment decisions. For instance, Advice Seekers consider a relatively broad range of options when searching for guidance on their investment journeys.
This willingness to consider a wide variety of criteria and options highlights the opportunity for product providers to address this substantial segment with solutions outside their core lineup.
Self-Directed investors are more likely to consider past performance in their analysis of mutual funds (63 per cent) than of ETFs (39 per cent), for which cost of the investment (42 per cent) is their leading concern.
Within the large Advisor-Reliant market, advisor recommendation ranks first in the selection of both mutual funds (57 per cent) and ETFs (62 per cent), underscoring the absolute importance for asset managers to nurture their practice-level adviser relationships.