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Approximately every 12 weeks we review changes in Asset Allocation in the Advisor Perspectives (AP) Universe. Previous analyses were done:
May 13, 2008
February 19, 2008
November 15, 2007
August 15, 2007
May 27, 2007
This week we look at changes from April 26, 2008 to June 30, 2008, a period of nine weeks.
Our analysis looks at changes across the entire AP Universe. The AP Universe consists of assets from high net worth (HNW) and ultra-high net worth (UHNW) investors being managed by Registered Investment Advisors (RIAs). The AP Universe is divided into three tiers based on account size. In the tier containing the Largest Accounts, the average account size is approximately $3.7 million (and this remained constant over the 12 week period). Approximately 94% of the assets (by market value) are in the Largest Accounts, so this analysis is primarily indicative of shifts in this account tier. The size of the AP Universe grew by 1.8% over this period, through the addition of new RIAs and new accounts.
Some of the significant trends occurring during this period include:
- Over the last nine weeks, cash positions increased by 0.4%, continuing a trend that has been evident since August of 2007. Since that time, cash holdings have increased from 7.9% to 11.1% of total assets. Equity holdings (US and non-US) decreased by 0.3% although, during this period, the Dow decreased by 12.0%, from 12,892 to 11,350, so advisors kept equity allocation in line, either proactively or through routine rebalancing. Fixed income positions decreased by 0.2%.
- Assets shifted out of US equity and fixed income markets (-0.7%), offset by the increase in cash positions (+0.4%). There was a decrease in non-US assets (-0.6%). More significantly, since our analysis began in May of 2007, there has been a marked shift in assets out of US markets (from 71.4% to 64.7%), as cash positions have increased from 8.4% to 11.1% and non-US assets have increased from 9.8% to 12.7%.
- Within the US equity markets, over the last nine weeks there has been a shift out of large cap (-0.7%) and mid cap (-2.1%) and into small cap (+2.8%), as well as into blend (+4.6%) and out of growth (-4.7%).
- Within fixed income allocations, muni bond assets increased by 1.5% and taxable bond assets decreased by 1.1%. More significantly, taxable maturities continued to lengthen, while municipal bonds maturities continued to contract. On the taxable side, maturities lengthened considerably, with short term assets decreasing by 3.3%, medium term assets increasing by 2.5% and long term assets increasing by 0.8%. On the muni side, short term assets increased by 0.7%, medium term assets increased by 0.3%, and long term assets decreased by -1.0%. Investment grade taxable bond holdings decreased by 3.0% and medium grade holdings increased by the same amount. This change may be due to ratings downgrades, rather than proactive decisions or rebalancing by RIAs. Muni bond holdings exhibited the same pattern, with investment grade holdings increasing by 0.3%, medium grade holdings decreasing by -0.5%, and high yield holdings increasing by 0.2%.
The tables below show the complete data for the AP Universe for the periods from 5/27/07 to 8/15/07, 8/15/07 to 11/15/07, 11/15/07 to 1/31/08, 1/31/08 to 4/26/08, and 4/26/08 to 6/30/08. The number in parentheses is the total AUM as of 6/30/08.
By Asset Class ($41,236,797,474)
Asset Class |
5/27/2007 |
8/15/2007 |
11/15/2007 |
1/31/2008 |
4/26/2008 |
6/30/2008 |
Bonds |
27.7% |
29.2% |
28.9% |
28.1% |
24.8% |
24.6% |
Cash |
8.4% |
7.9% |
9.0% |
9.8% |
10.7% |
11.1% |
Equities |
63.5% |
62.1% |
60.9% |
60.9% |
62.7% |
62.4% |
Other |
0.4% |
0.8% |
1.2% |
1.2% |
1.8% |
1.9% |
Asset Class |
Change from |
5/27 to 8/15 |
8/15 to 11/15 |
11/15 to 1/31 |
1/31 to 4/26 |
4/26 to 6/30 |
Bonds |
1.5% |
-0.3% |
-0.8% |
-3.4% |
-0.2% |
Cash |
-0.5% |
1.1% |
0.8% |
0.9% |
0.4% |
Equities |
-1.4% |
-1.2% |
0.0% |
1.8% |
-0.3% |
Other |
0.4% |
0.4% |
0.0% |
0.6% |
0.1% |
By Domicile ($41,236,797,474)
Asset Class |
5/27/2007 |
8/15/2007 |
11/15/2007 |
1/31/2008 |
4/26/2008 |
6/30/2008 |
Cash |
8.4% |
7.9% |
9.0% |
9.8% |
10.7% |
11.1% |
Foreign |
9.8% |
11.5% |
12.1% |
11.7% |
13.3% |
12.7% |
Unknown |
10.4% |
11.2% |
11.3% |
10.6% |
10.6% |
11.4% |
US |
71.4% |
69.4% |
67.5% |
67.9% |
65.4% |
64.7% |
Asset Class |
Change from |
5/27 to 8/15 |
8/15 to 11/15 |
11/15 to 1/31 |
1/31 to 4/26 |
4/26 to 6/30 |
Cash |
-0.5% |
1.1% |
0.8% |
0.9% |
0.4% |
Foreign |
1.7% |
0.6% |
-0.4% |
1.6% |
-0.6% |
Unknown |
0.8% |
0.1% |
-0.7% |
0.0% |
0.8% |
US |
-2.0% |
-1.9% |
0.4% |
-2.6% |
-0.7% |
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