Each quarter we look at changes in Most Popular Mutual Funds in the Advisor Perspectives (AP) universe. This installment looks at changes from December 31, 2008 to March 31, 2009. Previous installments of this analysis were in February 2009, October 2008, July 2008, April 2008, January 2008, November 2007, August 2007, and May 2007.
Our goal is to identify significant changes in sentiment – either positive or negative – among RIAs whose clients are HNW and especially UHNW investors. Our methodology is explained below. In the PDF version we provide complete tables of the 25 funds with the largest current AUM in the full AP Universe, as well as in each of the three tiers based on account size (Largest Accounts, Mid-Sized Accounts, and Smallest Accounts).
As background, here are the changes across the AP Universe over the current measurement period:
Segment |
% Change |
Change in # of |
% Change in |
Full AP Universe |
5.5% |
3,067 |
5.8% |
Largest Accounts |
5.5% |
-354 |
-2.9% |
Mid-Size Accounts |
4.8% |
-936 |
-5.5% |
Smallest Accounts |
4.8% |
1,326 |
5.0% |
During the first quarter, US markets declined by 11.03% (based on SPY) and developed non-US markets declined by 14.00% (based on EFA). Changes in AUM of the AP Universe are due to changes in the number of accounts and advisors in the universe, as well as any increases or decreases of the value of the assets already in the universe.
Below are some of the significant changes in the AP Universe:
Funds Exhibiting Significant Gains
AGRBX (GROWTH OF AMERICA FUND)
- The fund moved from 7h to 3rd across the AP universe, with AUM increasing 70.6%. Thirteen new advisory firms added this fund, although the fund is held in 826 fewer accounts.
- Virtually all growth occurred within the largest accounts, where AUM increased by 100.5% with the addition of 2 new advisory firms. The fund moved from 9th to 5th among the largest accounts
DODGX (DODGE AND COX STOCK FUND)
- The fund moved from 18th to 7th across the AP Universe, and from 19th to 8th among the largest accounts. Fourteen new advisory firms and 33 new accounts added this fund. AUM increased by 75.1% across the AP universe.
- Virtually all growth occurred among the largest accounts, where 20 new accounts and 7 new advisory firms were added.
- This fund had been one of funds experiencing significant losses the prior quarter
VAIPX (VANGUARD INFLATION PROTECTED SECURITIES FUND)
- The fund moved from 19th to 10th across the AP Universe. AUM increased by 58.2% across the AP Universe, with 87 new accounts and 17 new advisory firms.
- The fund moved from 20th to 10th among the largest accounts, adding 61 new accounts and 12 new advisory firms.
Funds Exhibiting Significant Losses
IJR (ISHARES SPONSORED SMALL CAP 600 INDEX)
- The fund moved from 5th to 121st across the AP Universe. AUM decreased by 91.7%, with six fewer accounts and one less advisory firm using the fund. Among the largest accounts, the fund moved from 5th to 114th, losing 92.1% in AUM and 21 accounts, while gaining two advisory firms.
- The loss was due to a small number of large accounts no longer holding the fund.
XLU (UTILITIES SELECT SPDRS)
- The fund moved from 10th to 145th across the AP Universe. AUM decreased by 87.2%, with five fewer accounts and three new advisors using the fund.
- Among the largest accounts, the fund moved from 10th to 134th, losing 88.1% in AUM, 20 accounts, and gaining three advisory firms.
- The loss was due to a significant number of large accounts no longer holding the fund.
Methodology
We rank funds by the assets under management (AUM) within our universe. A fund's ranking can improve or decline only if its AUM changes relative to other funds. Such changes can be due to any of the following:
- Existing advisors shifting money into/out of existing accounts
- Existing advisors putting money into of new accounts, or closing existing accounts
- New advisors putting money into new accounts
- Gains or losses in AUM due to fund performance
- Funds moving from the mid-sized account tier to the largest account tier, and vice versa
In some cases, funds moved down in ranking, but their AUM increased and the number of advisors utilizing the funds remained constant, as did the number of accounts holding the funds. We do not consider this a significant change in sentiment regarding the fund, which is our guiding criterion in this analysis. We look for situations where one or -more often- more of the following occurred:
- Change in fund ranking
- Change in AUM beyond what would be expected due to fund performance
- Increase or decrease in the number of advisors using the fund
- Increase or decrease in the number of accounts holding the fund
We also eliminate situations where changes in fund usage were due to movements between account tiers. Some subjective judgment comes into play. We do not have a single objective metric or standard that allows us to measure changes in the universe. But we believe that the examples we show above exhibit evidence of changes in advisor/investor sentiment. We are providing the criteria we used to select these funds, so you can be the final judge as to whether the change in advisor/investor sentiment is significant.
Finally, we consolidate holdings across share classes for a given fund. The ticker symbol displayed is the first symbol, alphabetically, among the various share classes. It may not be representative of the share class or classes held in the AP universe.
