Sub-Advisory Market Is Robust, FRC Data Show

DeWitt also said that a record high of some $120 billion in mandate changes occurred in 2010, with nearly two-third of that activity coming in the mutual fund space. Now, she said, “we see sponsor firms giving subâ€advisor changes of the last year time to settle in, and foresee the level of manager changes moderating in 2011.”

FRC maintains a 10â€year history of mutual fund and variable annuity subâ€advisory asset growth, according to the statement.

In her comments, DeWitt discussed several of the key trends in the industry over the past decade.

• A 10% compounded annual growth rate in mutual fund assets
• An 11% compounded annual growth rate in variable annuities
• Greatest growth rate in sub-advised mutual fund assets led by corporate bond funds, international bond funds and international equities.

Looking ahead, DeWitt said: “We see the subâ€advisory market for the remainder of 2011 being a competitive environment, with performance pressure escalation, and broader market challenges. Toward the broader horizon, our view is of a market that will continue to grow along historic patterns, with relatively greater increases on the way for subâ€advised variable annuities.”