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Presenters:
Stan Gogev Director of Subadvisory Products
SI Research: Subadvisory 1Q 2016 &
Subadvisory Marketplace Overview Data as of June 2016
Jeff Strange Managing Director, US Research
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AGENDA
I. SI Research: Subadvisory 1Q 2016
II. Subadvised Market Overview
III. Mandate Change Trends
I. SI RESEARCH: SUBADVISORY 1Q 2016
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Sponsors With Highest Mandate Asset Growth, 1Q’14–1Q’16 ($ millions)
The Fastest Growing Sponsors Reflect the Diversity of Recent Success in the Subadvised Market
Summary of DBX Advisors and Factor Capital Management ETFs
Subadvised Relationships for ETFs May Become More Common
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LoCorr Funds Subadvisory Summary, 1Q’16
A Maturing Liquid Alts Market Provides Different Opportunities for Subadvisors
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Global Atlantic Subadvisory Summary, 1Q'16
There Are Still Areas of Growth for VAs
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Aspiriant Subadvisory Summary, 1Q’16
Success Stories Arise From Sponsors Seeking Specialization Through Subadvisers
JPMorgan Undiscovered Behavioral Value, 1Q’16
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The DOL Rule May Encourage Another Look at the Bridge Builder Approach
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Growth of Edward Jones Advisory Programs and Bridge Builder Funds Assets, 1Q’10‒1Q’16 ($ billions)
Edward Jones’ Advisory Business Leaves More Room for Bridge Builder Growth
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• Outlook for the subadvised variable annuity market
• Developments in sponsor hiring and due diligence processes
• Trends in subadvisory fees
• Profiles and insight on the largest subadviser sponsor firms
Upcoming Topics
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II. SUBADVISED MARKET OVERVIEW
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Unaffiliated and Affiliated Subadvised Assets Amount to $6.6T
Source: Strategic Insight Simfund SV
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$4,069$3,107 $3,633 $3,958 $3,887 $4,343 $5,168 $5,482 $5,426 $5,365
$914
$619$805 $932 $928
$1,056$1,235 $1,276 $1,228 $1,228$4,983
$3,726$4,438
$4,889 $4,814$5,399
$6,403 $6,758 $6,654 $6,593
2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-16
Sub-Advised Assets ($B)
Mutual Funds VA Funds
The Unaffiliated Subadvised Assets Account for $2.4T
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Source: Strategic Insight Simfund SV
$1,038$673 $859 $1,014 $1,006 $1,190 $1,475 $1,617 $1,622 $1,622
$528
$345$468
$575 $572$673
$789 $812 $787 $815$1,566
$1,019$1,327
$1,589 $1,578$1,864
$2,264$2,429 $2,410 $2,437
2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-16
Sub-Advised Assets ($B)
Mutual Funds VA Funds
Number of New Subadvised Funds Launched Since 2007
• .
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Source: Strategic Insight Simfund SV Unaffiliated assets only.
249
177
113 107147
178 187206 218
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2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-16
# of New Sub-Advised Funds
Nearly Half of the VA Assets are Subadvised
Source: Strategic Insight Simfund MF & VA
• .
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9% 8% 8% 9% 9% 9% 9% 7% 8% 9% 9% 9% 10% 10% 10% 10%
31% 32% 33% 34% 36% 37% 38% 38% 39% 41% 42%45% 45% 46% 46% 46%
Sub-Advised Share of Total Mutual Fund and VA Assets
Mutual Funds VA Funds
III. MANDATE CHANGE TRENDS
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Mandate Change Activity Exceeded $100 Billion in Each of the Last 4 Years
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Source: Strategic Insight Simfund SV Unaffiliated assets only.
$51 $55$32
$57 $51 $64 $56$85
$65$46
$28 $27
$30
$29 $26$39 $54
$40$47
$47
$78 $82
$62
$85$77
$103 $110$125
$112$94
2007 2008 2009 2010 2011 2012 2013 2014 2015 Jun-16
Mutual Fund and VA Mandate Changes ($B)
Mutual Funds VA Funds
Mandate Wins Rallied in Q2 2016
Source: Strategic Insight Simfund SV
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$22 $33 $29 $39 $30 $27 $27 $23$47
$16 $19
$75$8
$8 $5$8
$4 $2 $6 $5
$5
$10 $5
$3
$30$40
$35$47
$34 $29 $33 $28
$52
$25 $24
$77
Quarterly Mandate Change Activity ($B)
Unaffiliated Sub-Advisors Affiliated Sub-Advisors
Top Categories for Mandate Changes 2015 vs. YTD 2016
Source: Strategic Insight Simfund SV Unaffiliated assets only.
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$3.0
$3.3
$3.9
$6.3
$6.9
$7.4
$8.2
$10.8
$11.5
$12.7
Large Value
Multialternative
Small Growth
Foreign Large Blend
Large Growth
World Stock
All-50% to 70% Equity
Large Blend
All-30% to 50% Equity
Interm-Term Bond
2015 Mandate Changes ($B)
$2.7
$2.9
$4.1
$4.3
$5.2
$6.4
$7.2
$7.4
$8.4
$13.5
Small Growth
World Allocation
Money Market-Taxable
All-30% to 50% Equity
Foreign Large Blend
Interm-Term Bond
Large Blend
Large Growth
Prime Money Market
All-50% to 70% Equity
YTD 6/16 Mandate Changes ($B)
Contacts:
Stan Gogev Director of Subadvisory Products (212) 217-6881 [email protected]
Jeff Strange Managing Director, US Research (212) 217-6927 [email protected]
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