A new Cerulli report covering multiple surveys with over 7000 advisors between July 2011 and July 2012 shows that investors trust big advisory firms less and think active management of mutual funds is subpar.
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Although mutual funds overall have recovered the losses from the 2008 crisis, investors withdrew a net $72 billion from mutual funds and invested over $112 billion into exchange-traded funds (ETFs).
Investors are also looking to alternative strategies in the quest for higher returns.
Investment structure and strategy are being considered across multiple types of alternatives but the actual shift of investors into those strategies has, so far, been incremental.
Investors are looking beyond modern portfolio theory and standard diversification for added value to their portfolios. Most investors are allocating only 5% or 10% to alternatives and no one alternative strategy is currently favored.
Nineteen out of 25 mutual funds collectively lost over $15 billion in assets during the first quarter of 2012.