While these ‘mega’ funds account for less than 1.0% of the total number of mutual funds available for sale worldwide (of a total ~65,000 funds), they control 45% of the total global AuM (USD 10.2 of 23.0 trillion).
There is one consistency in the sea of change that is the investment management industry: the big continue to get bigger. Globally, there are now 774 mutual funds with greater than USD five billion in AuM – up from 650 at the end of 2007.
Édouard Carmignac: all-time great or one-hit wonder? (co-written with Steven Goldin of Parala Capital)
When it comes to evaluating a fund manager’s skill, performance numbers only give you part of the picture; it is crucial to also focus on the drivers of that track record.
The PIMCO Total Return Fund, the largest mutual fund in history, peaked at $292,875,998,695 in April of 2013. So did its captain, Bill Gross. This may in fact be the most prominent example of the rise and fall of a blockbuster fund in history. It is my assertion that this $293 billion high water mark will not be reached again.
One of the biggest killers of good asset management companies is too much money flowing into too few products too quickly. Blockbusters can both make and break asset managers.
It seems that American Funds, the formidable asset manager based in Los Angeles, is having a bit of an odd Oscars moment. They are winning all of the accolades but not seeing the box office sales.