Cerulli: VA Subadvised Assets to Grow by 25% Through 2014

The total subadvisory market tallied $2.8 trillion in assets under management at year-end 2011, according to the report. Growth in the subadvisory marketplace has been flat during the past three years, accounting for between a 12.4% and 12.5% share of long-term mutual fund assets, the report says.

Long-term mutual funds accounted for $1.7 trillion of the $2.8 trillion total. Variable annuities and retail separate accounts accounted for $730 billion and $321 billion, respectively.

The percentage of total subadvised alternative mutual funds current stands at 18.3%. This compares, the report notes, with 12% to 14% for traditional mutual funds. The top subadvised alternate mutual fund assets include commodities ($14.7 billion or 20% of all commodity assets), alternative allocation ($9.3 billion and 57%, respectively), and natural resources ($5.3 billion and 18%, respectively).

The average management fee and fee paid to subadvisors by asset class in 2012 were 0.95% and 0.47%, respectively, for international equity funds; 0.78% and 0.38%, for domestic equity funds; 0.57% and 0.27% for taxable bonds; and 0.44% and 0.22% for tax-free bonds.