Mutual Fund sales to hit $340B by 2012

Despite fierce competition, mutual fund net sales will grow at 2% annually, hitting $340 billion by 2012, FRC predicted.
JAN 09, 2008
Despite fierce competition from ETFs and managed accounts, mutual fund net sales will grow at 2% annually, hitting $340 billion by 2012, the Financial Research Corp. predicted. The Boston-based group made its predictions today in the study, “Mutual Fund Market Sizing 2007-2012: An Analysis of Channels, Sales and Assets.” Intermediary distribution channels will grow in gross sales, hitting 61%of all sales by 2012, up form 50% in 1999. But that growth will come at the expense of the direct-to-investor channel, which will deteriorate. Many sales will also come from the independent channel and are expected to go up over the next five years, the study found. In the last three years, the channel grew as more advisers became independent: There were 77,000 advisers in 2005, and 145,000 now. Accordingly, mutual fund assets will also expand for independents, reaching $830 billion by 2012. Banks will also rise to power as a distribution channel, according to the study. They will experience strong growth in net sales and assets, powered by a wave of mergers and the use of platform programs to address the lower end of the wealthy investor spectrum, Ian Rubin, senior vice president of retail investment markets research at FRC, said in a statement.

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