Customization and Access to Private Market Investments Determine Winners in HNW Wealth Space

February 29, 2024 — Boston

This issue of The Cerulli Edge—U.S. Monthly Product Trends analyzes product trends as of January 2024, including mutual funds and exchange-traded funds (ETFs), and explores the product and service offerings high-net-worth (HNW) practices are adopting.

Highlights from this research:

  • Mutual fund assets decreased just $10 billion to $18.5 trillion in January due to the small effects of both net outflows and market performance. However, on the basis of flows, this was their best month since a year ago in January 2023.
  • ETF assets grew 0.6% in January on $43.5 billion in net flows, as they pushed to a new all-time high. The division of flows among active and passive ETFs was notably close, at $20.9 billion and $22.7 billion, respectively. Commodities and allocation ETFs had a particularly bad month in January, shedding 2.5% and 2.3% of assets due to flows during the month, respectively.
  • Uncertain economic, monetary, and political outlooks—as well as increased emphases on tax awareness and ESG considerations—are driving high-net-worth (HNW) wealth management firms to improve their strategic asset allocation services in many ways.
  • Integrating customization and optimization tools (e.g., direct indexing) into wealth managers’ standard asset allocation service offerings is increasing firms’ ability to provide their clients additional value. Implementing more bespoke investment solutions and private market investment access to clients at scale increasingly requires intermediaries have a robust account aggregation and performance reporting ecosystem.

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Note to editors

These findings and more are from The Cerulli Edge—U.S. Monthly Product Trends, February 2024 Issue.

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