Managed Accounts: Trend-Based Forecast For 2018
How are managed account assets projected to grow over the next 6 months? In this Envestat report, we analyzed past managed account data to come up with a forecast for gross sales, redemptions, and net flows for the first half of 2018.
In this edition, we offer insights about:
- Growth in assets by program, security type, and investment style
- Gross sales, redemptions, and net flows by the top 10 investment styles
- How gross sales were distributed by program and security type
Using Envestnet Analytics forecasting tools, we ran data based on actual results for three different time periods: prior 3 months, prior 6 months, and prior 12 months. The forecasting tool factors in actual trends relative to sales, redemptions and flows. It also incorporates seasonality of data and further assumes flat markets; in other words, no capital markets assumptions were added that might skew the analysis.
After studying the output, it became clear that there was a great deal of similarity in the forecasts for June 2018 based on data for the three time periods.
Honing in on the prior 6-months’ data in Exhibit 1, we can see that asset growth for the first 6 months of 2018 is expected to total $29 billion, which is a 9% increase over 12/31/17 assets. This asset growth is driven by nearly $65 billion in new sales and assumes a 1.9% average monthly redemption rate.
Growth rates for assets and net flows ran somewhat higher over the last 3 and 6 months versus the past 12 months, owing to stronger markets in the second half of 2017.
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