Advisors to Increase Allocations to Actively Managed Non-U.S. Equity Funds

Lexington, MA. Over the next six months, 34% of financial advisors will be increasing their allocations to actively managed non-U.S. equity funds by more than 3%. Advisor Perspectives obtained this data from a survey conducted over the last month, for which it received responses from 778 advisors.

“Given that P/E multiples are lower in emerging and developed non-U.S. markets than they are in the U.S., this is not surprising,” said Robert Huebscher, CEO of Advisor Perspectives. “But fund companies should take note of the interest in actively managed funds, which may signal a reverse in the recent trend of asset flows from active to passive.”

The second highest category was traditional index funds, to which 30.4% of advisors plan to increase allocations. That was considerably higher than the 22.4% of advisors who plan to increase their allocations to non-cap weighted (smart-beta) funds.

The least popular asset class was high-yield bond funds, to which only 6.1% of advisors plan to increase allocations. Among the responses to the “other” category were advisors who plan to increase their allocations to individual securities, such as municipal bonds.

“Analysis of the fund industry has been focused on dissecting trends in the historical flows of assets,” Huebscher said. “We believe fund companies are more interested in what advisors plan to do rather than what they have already done, and we are responding to that need.”