April 16, 2012

Clients Doubling Down With Their Current Mutual Fund Managers: Study

Cogent Research finds affluent investors cutting the number of fund families they work with

A recent survey has found that affluent investors have reduced the average number of fund families they work with from 1.90 to 1.56, according to a report released by Cogent Research on Thursday. The study also concludes that nine mutual-fund groups should expect “stronger than average investment momentum from investors in 2012,” according to Cogent.

The poll of more than 4,000 affluent investors shows that investors are three times as likely to increase investments with their current managers as they are to redeem investments—a sign of strengthened loyalty to existing providers, the Cambridge, Mass.-based research firm says.

“A year ago, it was often the case that more clients were planning to give up on a manager than invest more money,” said John Meunier (left), a principal with Cogent Research, in a press release. “Today, the opposite is true. Investors who stuck it out with their current managers are prepared to grow these relationships.”

In the 2012 Investor Brandscape report released by the research group, Cogent determined the affluent investor investment momentum, or AIIM, score for the top mutual-fund providers. These ratings were determined by calculating the average net score for all clients who plan to either increase or redeem investments, indexed to 100.

This year, the average AIIM score across close to 30 providers was 23%, with results ranging from a low of -7% to a high of 34%.

“This year, only two firms we looked at had negative AIIM scores. Last year, there were seven negative and nine in the single digits. There’s no doubt things are improving for asset managers.”

Topping the list of expected mutual-fund gainers in 2012 are Vanguard (34%) and T. Rowe Price (33%); followed by Fidelity Advisor Funds (31%), Fidelity Investments (30%), American Funds (28%), Wells Fargo Advantage Funds (27%), Schwab/Laudus Funds (26%), J.P. Morgan Funds (25%), and ING Funds (25%).

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