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Washington, D.C., Feb. 12, 2003 -- Assets held in separately
managed accounts industry-wide totaled $398.71 billion at the end of
2002, according to quarterly figures for account assets under
management released today by The Money Management Institute (MMI).
The quarter-end total was up approximately 4.4 percent
from the $381.86 billion (restated) recorded at the close of 2002’s
third quarter. At year-end 2001, the asset total was $399.71 billion.
The figures are based on a survey of managed account
sponsor firms conducted by the MMI, whose membership comprises the
industry’s leading program sponsors as well as their selected
professional portfolio management firms.
Managed accounts are individual
accounts offered by financial consultants utilizing a broad range of
advisory services and are usually managed by professional, independent
money managers using an asset-based fee structure.
The MMI’s quarterly assets
under management (AUM) figure is based on program totals reported by
Merrill Lynch, Morgan Stanley, UBS PaineWebber, Prudential, and Smith
Barney – the industry’s five market leading firms, which collectively
hold approximately 70 percent of the overall market – in addition to
totals reported to the MMI by a selection of smaller firms that
represent a proxy for the remainder of the managed account industry.
The MMI’s quarterly survey of industry AUM
tracks growth in assets specifically in managed account programs under
the direction of financial advisors associated with the
industry-leading program sponsors as well as those with other firms
industry-wide.
Stable Asset Base
The relative stability of the separately managed account marketplace
in 2002 on a year-end to year-end basis contrasts sharply with the
trend in the investment markets generally over the same time period.
As indicators of broad market trends, large
U.S. stocks (the S&P 500 Index) fell by 22.10 percent, smaller U. S.
stocks (the Russell 2000 Index) fell by 20.48 percent, and foreign
stocks (the MSCI Europe/Australia/Far East Index) fell by 15.94%
during 2002.
New
Investors
The industry’s stable asset
picture was complemented during 2002 by strong growth in the number of
individual investors participating in the market.
The SMA industry added 330,000 new
investors during the first nine months of 2002, according
to Financial Research Corp. (FRC), which provides consulting
and support services to the MMI on industry data-gathering and
analysis initiatives.
That total likely grew to 500,000 by year-end
2002, according to Kevin M. Keefe, FRC vice president, who directs the
firm’s managed-account efforts.
“Overall market performance for the first several
weeks of the New Year generally has been consistent with the difficult
trend of the past three years,” said Christopher L. Davis, MMI
Executive Director.
“At the same time, we have seen only a continuation of
our industry’s long-term trend: pronounced investor concern about how
best to manage assets against essential goals in a challenging market
environment, matched by growing investor interest in the benefits of a
disciplined, advisor-directed method to individual investment
management,” he said. “These forces will continue to shape the
stability of our market and the expanding investor acceptance of the
managed account approach.”
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