Financial advisors say a lack of research coverage and poor information limits their use of closed-end funds, according to a joint Aberdeen Asset Management Inc. and Harris Interactive study released Wednesday.
Aberdeen made the study results available at the Capital Link 10th Annual Closed-End Funds and Global ETFs Forum held Wednesday at the Metropolitan Club in New York, attended by more than 1,000 finance professionals, 70% of whom were financial advisors. Aberdeen was the event’s lead sponsor.
The online survey conducted by Harris Interactive over one week in March polled more than 800 financial advisors in the United States about their closed-end fund (CEF) use across wirehouses, regional brokerage firms and independent wealth managers.
“The most illuminating result of the closed-end fund survey is that more than 75% of financial advisors are hungry for additional research coverage and increased communications from sponsoring asset management firms and other parties,” said Gary Marshall, head of the Americas at Aberdeen, in a statement.
At the forum, ETFS Marketing Senior Vice President Tim Harvey said that closed-end funds have gained a reputation for creating supply-and-demand problems because CEFs have a fixed number of shares outstanding and tend toward higher volatility. And Calamos Investments Chairman and CEO John Calamos conceded that the closed-end market’s challenge is distribution even though it is showing signs of opening up to more investors.
However, Morningstar Closed-End Fund Analyst Cara Scatizzi noted that Morningstar launched CEF coverage in 2010 and began publishing fund analysis in January because of growing investor interest in closed-end funds.