U.S. Product Development 2024
The Future of Funds of Funds & Defining Direct Indexing
Future-Proof Product Initiatives
- Explore market sizing and pricing trends for various investment vehicles, including mutual funds, money market funds, exchange-traded funds, and closed-end funds
- Discover best practices for the product organizational structure
- Understand the priority placed by product organizations on incorporation of ESG/SRI principles into investment products
- Make informed product development and management decisions using end-investor and advisor demographic and attribute data
- Evaluate the expansion of product lines in new vehicle structures, with a focus on exchange-traded funds (ETFs) and the choice of active ETF structures
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Summary
Examine the complex U.S. product landscape for institutional and retail client segments, with special focus on financial advisor product use. Understand how advisors are using active and passive, which investment vehicles they prefer, and how they allocate client assets across asset classes/strategies.
A Note from the Author
The Outlook for Funds of Funds
Matt Apkarian, CFA
Associate Director
Bio →
Matt Apkarian, CFA
Associate Director
Matt is a member of Cerulli’s Product Development practice, which focuses on trends related to asset managers’ product development and management functions. This broadly includes assessing the opportunity for product development, evaluating emerging product trends, and understanding distribution and product positioning for investment products across retirement, retail, and institutional channels.
Prior to joining Cerulli, Matt held roles in
several business units at Fidelity Investments, including Workplace Investing,
Personal Investing, and Fund Operations. Most recently, he worked as an
Investment Data Analyst for Strategic Advisers, LLC.
Full biography here.
Financial advisors are prioritizing the use of model portfolios over funds of funds (FoFs) for the value and level of customization offered. According to the research, 61% of advisors expect to prioritize their use over FoFs.
Cost and customization are among the top barriers to adoption. The FoF structure continues to conflict with part of the value offered by financial advisors as portfolio managers, while model portfolios serve as a happy medium of outsourced full-portfolio solutions that enable customization at the hands of advisors.The FoF structure will still retain value in certain segments of the market, particularly retirement. Cerulli believes that the FoF structure will continue to be a mainstay of defined contribution retirement plan lineups. Industry focus on defined outcome products and decumulation may give rise to opportunity within the FoF structure.
To learn more on this topic, access The Cerulli Report—U.S. Product Development 2024. Gain insight into advisor use of investment vehicles, top product development initiatives for asset managers, and more.
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