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Each quarter we look at changes in Most Popular Mutual Funds in the Advisor Perspectives (AP) universe. This installment looks at changes from June 30, 2009 to September 30, 2009. Previous installments of this analysis were in July 2009, June 2009, February 2009, October 2008, July 2008, 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 |
Change in # of |
% Change in |
Full AP Universe |
38.4% |
10,143 |
17.2% |
Largest Accounts |
39.4% |
3,634 |
28.2% |
Mid-Size Accounts |
20.0% |
3,262 |
18.5% |
Smallest Accounts |
9.6% |
3,247 |
11.5% |
Changes in AUM of the AP Universe are due to changes in the number of accounts and advisors in the universe, as well as any increases or decreases of the value of the assets already in the universe.
Below are some of the significant changes in the AP Universe:
Funds Exhibiting Significant Gains
TFEQX (TEMPLETON INSTITUTIONAL FOREIGN EQUITY FUND)
- The fund moved from 21st to 12th across the AP universe, with AUM increasing 64%. The fund is held in 26 additional accounts.
LLPFX (LONGLEAF PARTNERS FUND)
- The fund moved from 44th to 19th across the AP Universe. AUM increased by 117% across the AP Universe, with 17 new accounts and 2 new advisory firms.
HAINX (HARBOR INTERNATIONAL FUND)
- The fund moved from 27th to 20th across the AP Universe. AUM increased by 41% across the AP Universe, with 519 new accounts and 15 new advisory firms.
Funds Exhibiting Significant Losses
VMLTX (VANGUARD LIMITED TERM TAX EXEMPT FUND)
- The fund moved from 10th to 17th across the AP Universe. AUM increased by 5.5%, with 7 additional accounts and 2 additional advisory firms using the fund.Â
VFIAX (VANGUARD 500 INDEX FUND)
- The fund moved from 14th to 23rd across the AP Universe. AUM decreased by 11.5%, with 213 fewer accounts and one fewer advisory firm using the fund.Â
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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