ORLANDO, Fla., June 7, 2018 /PRNewswire/ -- According to
the Pershing Asset Flows Barometer, launched today by BNY Mellon's
Pershing (Pershing), net inflows to mutual funds on the Pershing
platform reached $8 billion in the
first quarter of 2018, a 68 percent increase compared to the same
period in 2017, pointing to a renewed interest among financial
professionals in mutual funds.
Pershing Asset Flows Barometer takes a holistic look at how
advisors have steered their clients' investments over the past
year, and identifies relevant trends. The data is compiled from
1,400 Pershing clients, 28.7 million individual positions,
$650 billion exchange-traded-funds
(ETFs) and mutual fund assets under custody.
Mutual funds make a comeback, while growth in ETFs slow
down
As financial professionals turned toward more active
investment strategies in the first quarter of 2018, ETFs
experienced a slight slowdown.
Inflows into ETFs on the Pershing platform were at $6.2 billion in the first quarter of 2018, a
decrease of about 14 percent compared to the prior year when ETF
inflows were at $7.2
billion.
"While ETFs enjoyed banner growth over the past few years,
mutual fund allocations have made a comeback since the beginning of
2018, largely due to increased volatility in the markets," said
Justin Fay, director of financial
solutions, responsible for alternative investments and ETFs at BNY
Mellon's Pershing. "As advisors look to diversify their investment
strategies to actively manage against emerging risks in the market,
we are starting to see mutual fund inflows close the gap with
ETFs."
Over the past 12 months, ending March 31,
2018, ETFs on the Pershing platform experienced a net inflow
of $29.5 billion, an increase of 25
percent from the same period prior year. Meanwhile, mutual funds
had a net inflow of $22.7 billion
during the same period, which is four times higher than the prior
12 months.
Further, assets on Pershing's no-transaction-fee ETF platform,
FundVest® ETF, which launched in June
2017, exceeded $1.8 billion as
of the first quarter of 2018.
Institutional shares gain in popularity; triple zero shares
see slower adoption
Almost all of the $8 billion inflows into mutual funds in the first
quarter of 2018 went into institutional shares, which usually have
the lowest expense ratio of all share classes and typically don't
require sales charges. There are more than 3,000 institutional
shares trading on FundVest®, Pershing's no-transaction-fee mutual
fund platform.
"The trend toward lower cost share classes continues despite the
uncertainty in the regulatory environment," said Rich Calvario, director of investment solutions
at BNY Mellon's Pershing. "This is no surprise given that financial
professionals have been working for some time to reduce conflicts
of interest related to their product choices. As such, we have seen
inflows to the institutional shares come at the expense of other,
commission-based share types."
In the 12 months ending March 31,
2018, outflows from A, B, C, and retail no-load shares have
exceeded $10 billion.
Further, while the industry has scrambled to add so-called
"clean," or triple zero, shares to platforms in anticipation of the
Department of Labor's (DOL) now-scuttled fiduciary rule, "advisors
have not been quick to adopt these products," according to
Calvario.
Pershing has added 1,400 triple zero share class funds to its
platform since January 2017. However,
as of the first quarter of 2018, assets in these funds totaled up
to less than 2 percent of mutual funds custodied at Pershing.
"The SEC's definition of clean shares and the uncertainty around
the DOL fiduciary rule have left advisors content with choosing
institutional shares as a viable product choice for the time
being," added Calvario. "That said, despite the slow adoption so
far, it is not unusual for new share classes to take many years
before achieving broad adoption. So the jury is still out on triple
zero shares.
"At Pershing, our priority is to help our clients realize their
business and investment goals. We do that by providing them with
one of the broadest selection of products and solutions at the most
competitive levels. As some of our competitors turn more toward
proprietary solutions, we offer the benefit of an open platform,
supported by our holistic wealth management capabilities,"
concluded Calvario.
About BNY Mellon's Pershing
BNY Mellon's Pershing and
its affiliates provide advisors, broker-dealers, family offices,
hedge fund and '40 Act fund managers, registered investment advisor
firms and wealth managers with a broad suite of global financial
business solutions. Many of the world's most sophisticated and
successful financial services firms rely on Pershing for clearing
and custody, investment and retirement solutions, technology,
enterprise data management, trading services, prime brokerage and
business consulting. Pershing helps clients improve profitability
and drive growth, create capacity and efficiency, attract and
retain talent, and manage risk and regulation. With a network of 23
offices worldwide, Pershing provides business-to-business solutions
to clients representing approximately 7 million investor accounts
globally. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon
company. Additional information is available on pershing.com,
or follow us on Twitter @Pershing.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping its
clients manage and service their financial assets throughout the
investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries. As of March 31, 2018, BNY Mellon had
$33.5 trillion in assets under
custody and/or administration, and $1.9
trillion in assets under management. BNY Mellon can act as a
single point of contact for clients looking to create, trade, hold,
manage, service, distribute or restructure investments. BNY Mellon
is the corporate brand of The Bank of New York Mellon Corporation
(NYSE: BK). Additional information is available on
www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our
newsroom at www.bnymellon.com/newsroom for the latest company
news.
Sanuber Grohe
+1 201 413 2247
sanuberbilguvar.grohe@pershing.com
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SOURCE BNY Mellon