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Portfolio > Mutual Funds

FRC: SMAs Gaining On Mutual Funds

By Staff Writer

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NU Online News Service, Nov. 19, 11:18 a.m. – Mutual funds will have a tough time competing with separately managed accounts for the assets of the newly affluent over the next three to five years, according to a report from Financial Research Corp., Boston.

FRC includes products such as multi-discipline accounts, hedge funds and exchange-traded funds under the SMA label. Thanks to factors such as tax efficiency and improvements in sales and administration technology, the market share of the whole SMA category is increasing, FRC says.

The ratio of mutual fund assets to SMA assets has dropped to about 9 to 1, from 15 to 1 at the end of 1996, and the ratio will probably fall to about 5 to 1 by 2005, FRC researchers predict.

FRC is a unit of BISYS Group Inc., New York.

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