Distribution strategies among global asset managers are still very much a "regional affair" and quite often a local one, according to new data from Cerulli Associates, which suggests that the US has the most fragmented market in this respect.

When it comes to mutual fund distribution strategies, institutions, excluding 401(k), are the most prevalent channel in the US at 18.7 per cent. After this, discount trading platforms/mutual fund supermarkets prevail, at 18.6 per cent, followed by: private defined contribution (401(k)) (15.7 per cent); wirehouses (12.4 per cent); private client/bank trust (8.4 per cent); RIA (8.3 per cent); independent broker-dealer (6.2 per cent); regional broker-dealer (6 per cent); direct from product manufacturer (3.7 per cent); bank broker-dealer (1.1 per cent); and insurance broker-dealer (1 per cent).

This level of fragmentation is “usually a negative,” the research firm said, but in this instance is positive. By way of comparison, the data shows that in Europe there are three main distribution channels. They are: captive/affiliated (38.4 per cent), third-party (36.8 per cent) and direct/institutional (24.7 per cent).

In Latin America - representing Argentina, Brazil, Chile, Colombia, Mexico, and Peru - the level of fragmentation is higher than Europe, but less than the US, with direct sales to institutions at the top (51 per cent) followed by: retail bank agencies (19.4 per cent); private banks (16.3 per cent); direct sales to individuals (10.7 per cent); brokerage (1.4 per cent); independent advisory (1 per cent); and insurance (0.3 per cent).

In Asia, just under half of mutual funds (47.9 per cent) are managed by local/affiliated banks. After this is securities companies (17.6 per cent); direct (11.1 per cent); foreign banks (8.5 per cent); IFAs (8.2 per cent); insurance (3.9 per cent); and private banks (2.7 per cent).

Global AuM expected to pick up from 2008 low

Meanwhile, Cerulli predicts that global assets under management are set to surpass $70.4 trillion - a figure $20 trillion higher than the industry’s low point in 2008 - by the end of the year. While non-US assets represent over half of global assets, the engine of growth will be the US - in the near-term at least, according to the research firm.

The report, Global Markets 2013: Growth in a Flat World, also suggests that, apart from Europe, Japan is the only region where asset growth is expected to falter. For example, looking at global mutual fund AuM as a percentage of household financial assets, of the US’ $30 trillion in total HHFA, 38.8 per cent are in mutual funds, whereas for Japan, the proportion is 3 per cent of $18 trillion.

Cerulli estimates $136 billion in net fees from mutual funds in 2013, which is a “larger number,” but not as high as the industry would hope for, it said, adding that some of the biggest and most recent reasons for this are regulations and product margin pressure. The US and Europe still - despite talk of high-growth emerging markets - account for 80 per cent of net fees. Asia-Pacific, Canada and Latin America represented a considerably smaller percentage of fees in 2012, for example, at 10.9, 5.9 and 4.5 per cent respectively.

Data from the report came from various data vendors and industry association, the firm said, as well as surveys of asset managers and research meetings/industry discussions. Data focuses on assets held on behalf of third parties.