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Changes in the Most Popular Mutual Funds
July 22, 2008
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Approximately every 12 weeks we look at changes in Most Popular Mutual Funds in the Advisor Perspectives (AP) universe.  This installment looks at changes from April 25, 2008 to July 19, 2008.  Previous installments of this analysis were in April 2008, January 2008, November 2007, August 2007, and May 2007

Our goal is to identify significant changes in sentiment – either positive or negative – among RIAs whose clients are HNW and especially UHNW investors.  Our methodology is explained below.  In the PDF version we provide complete tables of the 25 funds with the largest current AUM in the full AP Universe, as well as in each of the three tiers based on account size (Largest Accounts, Mid-Sized Accounts, and Smallest Accounts).
 
As background, here are the changes across the AP Universe over the current measurement period:

Segment

Change in
AUM

Change in # of
Accounts

% Change in
 Accounts

Full AP Universe

3.6%

1,745

3.4%

Largest Accounts

3.6%

309

2.5%

Mid-Size Accounts

5.6%

730

4.9%

Smallest Accounts

2.4%

706

3.0%

Below are some of the significant changes in the AP Universe:

Funds Exhibiting Significant Gains

PTRAX (PIMCO TOTAL RETURN FUND)

  • The fund moved up in overall ranking from 4th to 3rd as AUM expanded by 27.2% for the full AP universe.  Number of accounts grew by 207 across the AP universe, and fund is used by 10 new advisory firms.
  • Most of this growth was in the largest accounts, where AUM grew by 29.6% and 90 new accounts were added.
  • This fund was also one of the significant gainers in our last measurement period.

AGRBX (GROWTH FUND OF AMERICA)

  • Fund moved from 7th to 5th in ranking across the AP universe, and from 10th to 6th among the largest accounts.
  • AUM grew by 35.2% across the AP universe, with 64 new accounts and 12 new advisory firms.
  • Most of this growth was in the largest accounts, were AUM grew by 54.5% and 10 new accounts were added.

VINIX (VANGUARD INSTITUTIONAL INDEX FUND)

  • The fund moved from 34th to 12th across the AP universe, with AUM more than doubling (up 100.3%).
  • Among the largest accounts, where AUM increased by 106.8% with the addition of 9 new accounts and 4 new advisory firms.
  • Several other Vanguard funds moved up across the AP universe:  VMLTX (Vanguard Limited Term Tax Exempt Fund) moved from 19th to 15th; VBMRX (Vanguard Total Bond Markets Index Fund) moved from 25th to 18th; VTI (Vanguard Total ETF) moved from 23rd to 20th; and VAIPX (Vanguard Inflation Protected Securities Fund) added 24.4% in assets. 

Funds Exhibiting Significant Losses

  • No funds exhibited significant losses in the current period.

Methodology

We rank funds by the assets under management (AUM) within our universe. A fund's ranking can improve or decline only if its AUM changes relative to other funds. Such changes can be due to any of the following:  

  • Existing advisors shifting money into/out of existing accounts
  • Existing advisors putting money into of new accounts, or closing existing accounts
  • New advisors putting money into new accounts
  • Gains or losses in AUM due to fund performance
  • Funds moving from the mid-sized account tier to the largest account tier, and vice versa

In some cases, funds moved down in ranking, but their AUM increased and the number of advisors utilizing the funds remained constant, as did the number of accounts holding the funds. We do not consider this a significant change in sentiment regarding the fund, which is our guiding criterion in this analysis. We look for situations where one or -more often- more of the following occurred:

  • Change in fund ranking
  • Change in AUM beyond what would be expected due to fund performance
  • Increase or decrease in the number of advisors using the fund
  • Increase or decrease in the number of accounts holding the fund

We also eliminate situations where changes in fund usage were due to movements between account tiers. Some subjective judgment comes into play. We do not have a single objective metric or standard that allows us to measure changes in the universe. But we believe that the examples we show above exhibit evidence of changes in advisor/investor sentiment. We are providing the criteria we used to select these funds, so you can be the final judge as to whether the change in advisor/investor sentiment is significant.

Finally, we consolidate holdings across share classes for a given fund.  The ticker symbol displayed is the first symbol, alphabetically, among the various share classes. It may not be representative of the share class or classes held in the AP universe.


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