A significant portion of product development, for both retail and institutional distribution, will be dedicated to international and global strategies over the next year, according the June 2016 issue of The Cerulli Edge.

 

Asset managers report to Cerulli that they set aside 25% of retail product development plans in 2016 for these products, and 37% on the institutional side. Looking out over the next three years, global equity allocations are expected to increase regardless of investor type, while US equity allocations are expected to decrease.

 

Flows into passive mutual funds (US$14.9 billion) once again offset flows out of active mutual funds ($13.8 billion), assuring positive aggregate flows of $1.2 billion in May. Active mutual fund outflows are still driven by equity funds, with redemptions of $25.3 billion, while bond funds collected inflows of $14.4 billion.

 

Flows into ETFs summed to $7 billion for May, a decrease from April and March. Even though flows slackened, they contributed 0.3% in organic growth for the month, a sizeable portion of the 0.5% overall growth.

 

Traditional firms (e.g. wirehouses, IBDs) have been slow to adopt digital advice technology because, at first glance, it appears to create insuperable channel conflict problems with these firms' human advisors. But several are working on ways to mitigate channel conflict.