Of the 25 fastest growing fund firms identified by Strategic Insight, 20 had less than $5 billion in stock and bond fund assets under management, the research firm announced on Tuesday.
Strategic Insight analyzed managers of stock and bond funds for the 12-month period that ended March 2011, and ranked them by net flow growth rate. The ranking excluded very small managers, those with less than $1 billion in assets under management.
What's behind smaller firms' growth? According to Strategic Insight, smaller fund managers’ focused and specialized investment skills, coupled with high-conviction philosophies, give small managers an edge over other firms.
“The road to success among these firms highlights the unique capabilities of such fund managers and the continued demand for this type of skill among advisors and investors,” Dennis Bowden, senior research analyst at Strategic Insight, said in a press release. “So the fact that smaller fund managers dominate the list of fastest-growing firms is not surprising.”
DoubleLine Capital topped the list of fastest-growing firms, a feat made more remarkable when one considers the firm is only in its first year of operation. More than one-half of bond fund deposits among the 25 fastest-growing firms are from DoubleLine, and with $5.9 billion in net inflows since the firm's inception in April 2010, Strategic Insight found it is the fastest-growing U.S. mutual fund manager ever during its first year of operation.
Equity funds were largely behind small firms' success. Of approximately $56 billion in total net inflows, "a large majority" of commitments were to equity funds, according to the company, and almost half went to U.S. equity funds. International equity funds garnered $17 billion in the year ending March 2011.