Alt Mutual Funds AUMs Could Reach One Trillion Dollars
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Wednesday, November 30, 2011

Alt Mutual Funds AUMs Could Reach One Trillion Dollars

If you think alternative mutual funds are just the flavor of the month, think again. A new white paper released today by SEI and Strategic Insight is giving the sub-asset class legitimacy among its more traditional counterparts.

For example, the report reveals that investors poured more than $58 billion into regulated funds using alternative strategies in the first half of 2011 alone, and assets in the space are projected to reach $1 trillion by 2014.

By the end of September 2011, the U.S. had roughly 760 alternative mutual funds and ETFs, 150 of which had been launched year-to-date in 2011.

"The growth we've seen in registered alternative funds represents the early stages of a permanent shift in the fund landscape," stated Loren Fox, senior research analyst at Strategic Insight.

But despite the growth, the market for regulated alternative funds remains much more fragmented than traditional funds with no dominant players established," according to Ross Ellis, vice president and head of the SEI Knowledge Partnership for SEI's Investment Manager Services division.

"Partnerships that combine the investment expertise of existing alternative managers with the distribution prowess of traditional managers will become more common as managers of all stripes look for ways to gain a foothold in one of the most dynamic and growing parts of the asset management business," stated Ellis.

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