Advisors Still Love DFA But Warn That The Mutual Fund Era Is Waning Now

Wednesday, September 28, 2011 08:03
Advisors Still Love DFA But Warn That The Mutual Fund Era Is Waning Now

So far this year, Dimension Fund Advisors and PIMCO still have a lock on advisors' hearts, but the overall allocation to mutual funds -- good and bad -- may change soon.

This Website Is For Financial Professionals Only


According to the latest survey from Cogent, advisors rank DFA at the top, with PIMCO and Vanguard also getting the highest-tier "star" rating.


That's not really surprising. I know a lot of A4A readers love Dimension Funds. 


Previously unranked J.P. Morgan funds soaring all the way to the No. 2 spot is a bit more noteworthy. 


"The gap between DFA and the rest of the pack has narrowed substantially," John Meunier of Cogent notes.


A number of highly regarded fund families -- including troubled American Funds but also BlackRock, Columbia, and Hartford -- sank a lot in the rankings.


Cogent attributes advisor loyalty to performance and the research that the fund families provide.


However, they point out that the trend for the entire mutual fund industry points downward.


While use of mutual funds bumped back up to 97% of the advisory market this year, advisors are still allocating just 39% of their client assets to these vehicles -- compared to the days when this was the only game in town for many firms.


And a full 50% of the advisors Cogent talked to say they'll pull back from mutual funds over the next two years.


Comments (0)

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.