Sales Success Of The Year is awarded to an individual fund or line of funds that, whether through performance or sales strategy or a combination of both, has registered a dramatic increase in flows.
MainStay Large-Cap Growth Fund
Interest in the MainStay Large Cap Growth Fund exploded in 2011. The fund took in about $8.1 billion in assets, compared to $821.3 million in 2010, according to Morningstar—an increase of nearly 1,000%. Sales growth was so exponential, the fund’s management decided to close it to investors several weeks ago.
The fund invests in a diverse array of growth stocks and has been a consistent performer, receiving a four-star Morningstar rating and beating its category average over the one-, three-, five- and 10-year periods. The fund also comes in on the low side when it comes to expense ratio, charging investors 106 basis points.
MainStay’s increased penetration across the major distribution channels this year, as well as the fund’s inclusion in many wrap programs and retirement platforms, helped contribute to its sales success.
Templeton Global Bond Fund
The Templeton Global Bond Fund was the top selling global fund in 2011. The fund experienced $13.4 billion of inflows, according to Morningstar. Several factors have contributed to the fund’s success, notably Franklin’s “Global—The New Core” sales campaign, which focused on the importance of global investing. Templeton Global Bond was one of the funds highlighted.
Hundreds of seminars on global investing were delivered to investment advisors during 2011, and portfolio manager Michael Hasenstab regularly gives video and written commentary on his fund’s positioning. Hasenstab’s high profile has certainly helped the fund—he was named Morningstar’s 2010 Fixed Income Manager of The Year. Long-term performance has also helped boost the fund—it ranks in the fourth percentile for the five-year period ended Dec. 31 and in the first percentile over the 10-year period.
JPMorgan Funds’ Retail Lineup
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Jed Laskowitz
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JPMorgan Funds achieved high inflows across a broad spectrum of its retail offerings. The firm had $17.6 billion in inflows during the year, second only to PIMCO. Only 18% of those flows went to the firm’s flagship fund—typically, 50% or more of flows go to a firm’s top fund.
Jed Laskowitz, head of retail distribution, oversaw training programs that lead to JPMorgan’s internal and external wholesalers being ranked in the top five of Cogent Research’s top wholesaling firms polls—the only firm to have both sets of wholesalers in the top five. As part of the Market Insights communications initiative, advisors received weekly economic analysis and portfolio manager calls. Income-focused funds such as Income Builder, which took in $1.4 billion, satisfied investor appetite for income.
All of these factors helped JPMorgan to climb from number 13 in assets at the end of 2010, to number seven at year’s end ($136 billion).
Vanguard Total International Stock Index Fund
The Vanguard Total International Stock Index Fund was the top-selling mutual fund in 2011. It had $14.4 billion in inflows, according to Morningstar. The fund outpaced all others on a combination of its investment strategy, low fees and popularity within retirement plans.
Vanguard also launched an ETF share class of the fund in January. Investors were shying away from U.S. equities in 2011 and were looking for opportunities internationally. The Total International Stock Index Fund is four-star rated by Morningstar and was one of the few funds to receive a gold rating in the firm’s new analyst ratings launched in November.
The fund has expenses of 22 basis points, among the lowest in the category and has outperformed its category and benchmark MSCI EAFE Index over the one-, three-, five- and 10-year periods. It was also a popular strategy in Vanguard’s Target Retirement and LifeStrategy funds. The fund has also been promoted as one of Vanguard’s core offerings --along with Total Bond and Total Stock -- giving it prominent placement on Vanguard’s website.