After a few years in pause mode, the closed-end fund segment is once again attracting new inflows, new launches, new players and advisors, and attention from a wide range of providers. The positive market mood has helped, as has the segment’s nimbleness in reshaping its product shelf to capitalize on the “hot” investment stories and trends. The once-again strong inflow momentum in the closed-end fund segment has not gone unnoticed by mutual fund companies and hedge fund managers, several of which have joined the fray in the past couple of years. At a time of an intense “takeaway” game in the investment funds industry, the progress of the new arrivals in this segment is being closely observed by others with unitized product manufacturing capabilities and a keen eye on new sources of inflows.
The May 2011 Trend Lines story reviews the growth and sales experience of mutual funds in an expanded emerging markets category. As competition in Fundland heats up, mutual fund companies continue to innovate in order to stand out from the crowd, ensure relevance and secure competitive advantage. Exploring new investment mandates, including opening up access to previously uncharted geographic markets, is part of this cycle of innovation. The emergence of multiple fund flavours tapping emerging market equity, fixed income and balanced mandates is a good example of this ongoing process.