The Money Management Institute released a study in early May that shows how advisors in wirehouse broker-dealers are working with investors to add alternative investments to their portfolios. “Most investor portfolios have less than 5% of assets in alternatives, which is well below the 15% to 20% levels recommended for achieving proper portfolio diversification and investors’ objectives,” the report explained.
A group of five liquid-alternative mutual funds accounted for 75% of wirehouse net sales in 2013, say MMI and Dover Financial Research. “The rise of blockbuster funds reflects trends throughout the mutual fund industry, as wirehouses streamline their recommended lists and their model portfolios,” the groups noted.
Some of the factors influencing this “blockbuster” fund trend, the organization says, are investment performance, firm reputation and the distribution strengths of certain asset managers.
The study found that MainStay Marketfield Fund had net flows of $7.1 billion in 2013, representing about 26% of total flows coming from clients with wirehouse reps. Goldman Sachs Strategic Income fund attracted some $4.8 billion in flows, accounting for 18% of net wirehouse flows.
Other top funds included JPMorgan Strategic Income Opportunities ($3.2 billion), BlackRock Strategic Income Opps ($2.7 million) and BlackRock Global Long/Short Credit Fund $2.3 billion).