Tuesday, February 4, 2014

20 Best & Worst Fund Families of 2013

In 2013, total mutual fund assets grew by nearly 20%, or $282 billion, largely thanks to to substantial asset growth in passively managed products, reports Cerulli Associates in its latest industry report, released Friday.

Equity products dominated the fund landscape last year, capturing flows of $232 billion, the research firm says. They jumped by $5 billion in December.

Last year, of course, the markets had a solid year.

While the major U.S. market indexes are down about 4% this month, they had a terrific 2013. The Dow Jones rose 29.65%, the S&P 500 32.39% and the NASDAQ 40.12%. Meanwhile the MSCI World Index Ex-USA has a total return of 21.57%.

The Barclays U.S. Aggregate Bond Index, however, dropped 2.02%.

“With few exceptions, the largest mutual fund managers continued to grow their asset bases over the course of 2013,” said Cerulli in its latest report.

(Check out: 12 Best & Worst Broker-Dealer 401(k) Plans: BrightScope)

Of course, there were clear winners and losers among the mutual fund families in terms of fund flows in 2013. These results, the consulting group’s research shows, are largely tied to the performance of certain key funds that investors either loved or despised last year.

Larry Fink, CEO and Chairman of BlackRock Financial Management Inc.

10th Best

BLACKROCK (BLK)

BlackRock, owner of the iShares family of ETFs, had inflows of $11.4 billion last year. The latest Morningstar tally shows that fund had roughly $160 billion in total client assets. Its average fund performance was 11% in 2013, and its industry market share stayed steady over the past 12 months at 1.7%, Cerulli reports. 

9th Best

JOHN HANCOCK

John Hancock funds added roughly $11.6 billion in 2013. The group’s overall market share remained at 1.8%, and its funds had an average return of 14.3% last year. The company is part of Manulife Financial and is the main sponsor of the Boston Marathon.

A screenshot of MainStay Investments website.

8th Best

OAKMARK 

Oakmark increased its market share to 2% from 1.8% last year, thanks to fund inflows of $13.6 billion. Its funds had a strong average performance of 17.3% last year. The Oakmark International Fund (OAKIX), for instance, is ranked by Morningstar as the best performer in its fund category, rising more than 17% for the past 12 months and full-year inflows of $12.5 billion.

7th Best

MAINSTAY

MainStay Funds had inflows of $14.2 billion, increasing their market share to 2% from 1.9% in 2013. The MainStay Marketfield Fund (MFLDX) attracted $13.4 billion on net assets. The long/short equity fund had returns of 10.65% last year. As of late January, it is down about 0.6%, putting it well ahead of the S&P 500’s fall of over 3%, Morningstar says.

Lloyd Blankfein, CEO Goldman Sachs. (Photo: AP)

6th Best

GOLDMAN SACHS (GS)

Goldman Sachs funds attracted close to $15 billion in net inflows last year, giving it 3.8% market share vs. 3.6% a year earlier. The Goldman Sachs Strategic Income Fund (GSFAX) brought in over $11.5 billion fund flows. The fund, which has most of its holdings in short-term bonds, has a one-year performance of 4% and a three-year performance of nearly 5%.

5th Best

OPPENHEIMER FUNDS

Oppenheimer Funds, owned by Massachusetts Mutual Life, had fund inflows of over $16 billion in 2013, and its industry market share is close to 4%. Among its most popular products is the Oppenheimer Senior Floating Rate Fund (OOSAX), which had $11 billion of net inflows last year. The fund ticked up nearly 6% last year—nearly 6% ahead of most funds in its Morningstar category. 

Jamie Dimon, CEO of JPMorgan Chase (Photo: AP)

4th Best

MFS FUNDS

MFS Funds attracted some $18 billion on net inflows in 2013. Its current market share is about 4.7%, down from roughly 6% in 2012. Some of its most popular products are the MFS Lifetime 2010 Fund (MFSAX) and the MFS New Discovery Fund (MNDIX), a small-cap growth fund that rose 26.8% in the past 12 months, nearly 5% ahead of the S&P 500, according to Morningstar.

3rd Best

JPMORGAN FUNDS (JPM)

JPMorgan Funds had a stellar 2013, drawing more than $21 billion in net assets. The group now has about a 10% industry market share. The JPMorgan Strategic Income Opportunities Fund (JSOSX) had inflows of over $10 million last year; this fund has about $25 billion in total assets and it jumped more than 2% last year, ahead of most bond-focused investments. Another popular fund in its lineup is the JPMorgan Core Bond (WOBDX).

Bill McNabb, CEO and Chairman of Vanguard.

2nd Best

DIMENSIONAL FUND ADVISORS

Dimensional Fund Advisors, or DFA, had net inflows of nearly $23 billion in 2013. This helped push its market share to 10.6% of the industry from 10.1% a year earlier. Some of its top-performing funds are the DFA Tax-Managed US Marketwide Value (DTMMX), which rose over 40% last year, and the DFA Tax-Managed US Marketwide Value II (DFMVX), which had similarly strong results.

BEST

VANGUARD

Vanguard had 17.5% of industry market share in late 2013, up from 16.9% a year earlier. Its inflows were almost $75 billion, roughly three times that of the second-best fund family (DFA).

Four of its funds were in the top-10 fund list, as ranked by asset flows in 2013. At the top, was the Vanguard Total International Bond Index Fund (BNDX, VTIBX)—with inflows of $18.7 billion. In the number-two slot last year was the Vanguard Total International Stock Index Fund (VXUS, VGTSX) with inflows of $17.9 billion. The third most popular fund was the Vanguard Total Stock Index Fund (VTI, VTSMX) at $17.5 billion.

The Vanguard Total Bond Market II Index Fund (VTBIX) attracted $9.6 billion in net inflows, putting in in ninth place for 2013.

ING Corporate Headquarters in Amsterdam. (Photo: Wikimedia Commons)

10th Worst

DAVIS FUNDS

Davis Funds had outflows of $4.1 billion last year, according to Cerulli. The group is led by Christopher C. Davis, whose family started the firm in 1969. The family traces its roots to Shelby Cullom Davis, an advisor to governors and presidents and father of David Funds founder Shelby M.C. Davis.

9th Worst

ING RETIREMENT FUNDS

ING Retirement Funds experienced outflows of $4.8 billion in 2013. The portfolios can only be bought within variable insurance products and retirement programs. They include target date, target risk, fundamental equity, fixed income and real estate investments.

Jeffrey Gundlach, CEO & CIO of Doubline.

8th Worst

ROYCE FUNDS

Royce Funds’ outflows in 2013 totaled $5.1 billion. Founder Chuck Royce, who started the group in 1972, says the funds use a value-based approach to invest in companies with small market capitalizations.

7th Worst

DOUBLELINE

DoubleLine’s outflows were $5.8 billion last year. The firm, which is led by former TCW executive Jeffry Gundlach, specializes in fixed-income products, which had a tough 2013. It does offer investors U.S. equity products, as well, though Gundlach is bearish on how they will fare this year.

6th Worst

PERMANENT PORTFOLIO 

Permanent Portfolio’s products lost assets of $6.6 billion in 2013. Its flagship fund of the same name (PRPFX) lost 2% before taxes. The fund’s aim is to outperform the Citigroup 3-Month U.S. Treasury Bill Index, and its largest holdings are in gold, silver and U.S. Treasuries.

5th Worse

HARTFORD MUTAL FUNDS

Hartford Mutual Funds saw outflows of $9.3 billion in 2013. According to Morningstar, its average fund performance was 15% last year. The group appointed a new head of marketing a year ago, Jac McLean, formerly with Eaton Vance and MFS. It also expanded its relationship with sub-advisor Wellington Management.

4th Worse

JANUS FUNDS

Janus’ outflows were roughly $11.9 billion last year, about $6.2 billion moved out of the products in the last three months of 2013. Total assets under management were roughly $174 billion as of Dec. 31, up from $166.7 billion at Sept. 30, thanks to market gains. Janus CEO Richard Weil, who has led the firm since early 2010, has said the improving flows and results is "clearly the elephant in the room" as investors remain concerned with performance and portfolio manager changes.

3rd Worst

COLUMBIA FUNDS

Columbia Funds, led by Columbia Management Investment Advisers, lost roughly $12.1 billion in assets last year. The Ameriprise Financial (AMP) unit has seen several top executives depart in recent years, including its head of intermediary distribution and its U.S. asset management president. Its average fund return in 2013 was 13.4%, according to Morningstar.

Mohamed A. El-Erian, CEO and co-CIO of PIMCO (Photo: AP)

2nd Worst

AMERICAN FUNDS

American Funds experienced over $19 billion in outflows in 2013. Its year-end assets were roughly $936 billion, Morningstar says, and its average fund return last year was 15.7%. Two of its funds, however, made the top-10 outflows list recently compiled by Cerulli: the American Fund Growth Fund of America, losing close to $10 billion of client assets to outflows, and the American Fund Bond Fund of America, losing $6.3 billion. 

WORST

PIMCO

The performance of many bond funds run by PIMCO, which just announced that its CEO and co-CIO Mohamed El-Erian will leave his posts in mid-March, moved down sharply last year, when the fund family had outflows of $30.4 billion. Its flagship PIMCO Total Return Fund had close to $40.5 billion in redemptions, while its PIMCO Real Return Fund saw $7.6 billion go out the door. 

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