60 Long-Term Fund Managers Grew Organically By 10% or More in 2011

Jan. 6, 2012 - PRLog -- Despite a volatile year, 60 managers of stock or bond mutual funds grew organically by 10% or more through the first 11 months of 2011, announced Strategic Insight, a business intelligence provider to the fund industry. That was an increase of 62% from the 37 fund managers with 10%+ organic growth in full-year 2010.

Methodology: Data in the following tables, sourced from Strategic Insight’s Simfund database, includes fund managers with $1 billion+ in long-term funds or ETFs at Jan. 1, 2011. The 25 fastest-growing managers are based on net inflows through Nov. 2011 as a percentage of assets on 1/1/2011

Fastest Growing Long-Term Fund Managers:

Manager           |      Net Flows as % of 1/1/2011 Assets
--------------------+----------------------------
DoubleLine Capital | 260%
Stone Harbor | 112%
Yacktman  | 82%
AQR | 75%
Cambiar  |  75%
TFS Capital |  58%
ALPS Advisors |  55%
Pacific Heights |  51%  
JPMorgan Chase (ETN)  | 47%
Rafferty (Direxion) |  46%

The fastest-growing managers of 2011 included a variety of specialized/boutique organizations and industry innovators, such as: DoubleLine Capital, the opportunistic bond fund specialist; emerging-markets specialist Stone Harbor; stock-picking boutique Yacktman; AQR, an alternatives manager that has branched out into non-traditional mutual funds; Cambiar, a specialist in relative-value equity investing; TFS, which has managed a successful market neutral fund; ALPS Advisors, which debuted a popular MLP ETF in 2011; Pacific Heights, whose Permanent Portfolio has been a popular global asset allocation vehicle; investment bank JP Morgan Chase, which has garnered flows to its Exchange-Traded Notes; and Rafferty (Direxion), on the strength of demand to its leveraged (3X Bull, 3X Bear) strategies.

“Investment boutiques, international and global investing specialists, and providers of non-traditional and opportunistic strategies are all common to this list,” commented Avi Nachmany, Strategic Insight’s Director of Research. “Indeed, the broadening appeal of non-traditional strategies in 2011 helps explain why there were so many more fund managers with organic growth of 10% or more in 2011 versus 2010. As 2012 begins with persistent economic challenges, we expect that unconventional approaches and strong investment convictions will again find audiences this year.”

Of the $79 billion in net flows garnered through the first 11 months of 2011 by this group of 25 fastest growers, a higher proportion of flows went to equity funds than seen in the general mutual fund/ETF universe (where equity funds were in net outflows in full-year 2011). This is not unusual, however, because smaller firms often can more easily distinguish themselves and establish reputations with equities or alternative strategies.  

“And while many of the fastest-growing managers naturally started 2011 fairly small, a number of rapidly growing managers last year were over $20 billion in size, including MainStay and Virtus, as well as fixed-income specialist TCW, and rising ETF powerhouse Van Eck,” said Loren Fox, a senior research analyst at SI.  

“The rapid and unique growth of smaller fund managers is often overlooked amid the attention to large fund management firms that have helped drive the mutual fund industry to significant growth post-crisis,” said Mr. Nachmany. “But small and mid-size fund managers look to be a significant source of growth going forward, especially as the mutual fund industry continues to be a center of product innovation.”

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Strategic Insight, founded in 1986, is a leading research firm for the mutual fund and wealth management industry, providing clients with in-depth studies, consultation, and electronic decision support systems. Strategic Insight assists more than 250 firms worldwide, including the largest U.S. mutual fund companies. Visit us at www.SIonline.com. SI’s parent, Asset International, is a privately held provider of information and technology to global pension funds, asset managers, financial advisers, banking service providers, and other financial institutions in the private and public sector. The company has offices in New York, Hong Kong, London, Melbourne and Stamford, CT. For additional information, visit www.AssetInternational.com.