mutual funds
Mutual funds underperform in 2011Posted by RJ and Makay on Jan 05, 2012 |
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Mutual fund performance in 2011 brought some surprising results, according to Standard and Poor’s and Morningstar analysts. Despite the positive outlook at the beginning of the year in emerging markets such as China, India and Brazil, portfolios heavily weighted in emerging markets had some of the largest losses for the year. By contrast, a concentrated fund with just 22 holdings and no new stocks added for the past 75 years was a top performer.
Since the 2008 financial crisis, investors have remained cautious, though their risk tolerance has actually held steady, according to the Investment Company Institute’s (ICI) 2011 Annual Mutual Fund Shareholder Tracking Survey. In May 2008, 36% of fund-owning households said that they were wiling to take substantial or above-average risk. That level of risk tolerance has held at 29% for the three years since the crisis.
Though investment performance is important, a new study finds that it’s the soft traits that drive advisor loyalty to mutual fund providers. Gogent Research surveyed 1643 advisors this past spring to measure their degree of loyalty to their current providers and the likelihood of making future investments with those providers. Based on advisor responses, Cogent combined the two measures to develop a mutual fund provider commitment ranking.
