MutualFundWire.com: Active MFs Rank Fourth When It Comes to Product Dev Plans

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Tuesday, November 8, 2022

Active MFs Rank Fourth When It Comes to Product Dev Plans

When it comes to asset managers' product development plans, traditional active mutual funds are tied for fourth place right now, according to new research from an industry consulting firm.

Thomas Neil "Neil" Bathon
Fuse Research Network
Founder, Partner

For 40 percent of asset managers surveyed by the Fuse Research Network team, active mutual funds are a "major focus" of product development plans for the next 12 months, while developing such funds is "not a focus" at all for 25 percent of firms. (Both of those percentages are the same when the question is turned to developing model portfolios.) That's one of the findings in the new 2022 "Product Management & Development" report in Fuse's BenchMark series.

Fundster' product development plans, the Fuse folks find, are more likely to involve active ETFs (a major focus for 62 percent of firms, and not a focus for 10 percent), model delivery separate accounts (47 percent and 11 percent), and traditional SMAs (45 percent and 20 percent). This is the second year in a row that active ETFs have topped the list, according to the Fuse team.

"It is no surprise that an active ETF remains the top choice," states Michael Evans, director of BenchMark research at Fuse. "Its benefits over mutual funds in terms of trading flexibility, liqudity, tax efficiency, and low cost are well known."

Other product types were less commonly cited as being in the works. 32 percent of surveyed firms have a major focus on developing direct indexing (versus 47 percent with no focus), 30 percent on unregistered or private alternatives (versus 35 percent), 20 percent on translucent active ETFs (aka semi-transparant or active non-transparent, ANT, ETFs) (versus 40 percent), 19 percent on interval funds (versus 19 percent), and 10 percent on BDCs (versus 65 percent).

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