This issue of The Cerulli Edge—U.S. Monthly Product Trends analyzes mutual fund and exchange-traded fund (ETF) product trends as of January 2020. This issue also includes special coverage on institutional alternative investment use.

Highlights from this research:

• Despite falling 0.1%, mutual fund assets managed to stay above $16.3 trillion in January. The minimal decline in assets can be tied to volatile global equity markets, as net flows moving into the vehicle totaled $34.5 billion. U.S. ETF assets climbed 0.6% to $4.44 trillion in January, gathering a strong $48 billion in January net flows.

• Health and hospital systems’ top investment-related challenges include low interest rates/meeting return objectives, accessing top investment managers, and a lack of internal investment resources. In Cerulli’s 2019 Health and Hospital Systems Survey, 93% of respondents identified both interest rate environment and meeting return objectives as challenges. Health and hospital systems are turning to alternative investments, particularly through increases to private equity investments, to meet the return requirements that could previously be met through fixed-income allocations.

• Due to long periods of sustained low-interest rates, insurers have increased their allocations to alternatives within the return-seeking and liability-matching portion of their portfolio. A majority of asset managers that have experience working with insurance general accounts surveyed by Cerulli reported that they expect inflows to increase for private fixed income (87%), private equity (53%), and structured securities (53%).