We last reviewed changes in Asset Allocation in the Advisor Perspectives (AP) Universe on May 27, 2007. This week we look at changes since that date, a period of twelve weeks encompassing significant market volatility.
Our analysis looks at changes across the entire AP Universe. The AP Universe consists of assets from high net worth (HNW) and ultra-high net worth (UHNW) investors being managed by Registered Investment Advisors (RIAs). The AP Universe is divided into three tiers based on account size. In the tier containing the Largest Accounts, the average account size is approximately $3.7 million (and this remained constant over the 12 week period). Approximately 94% of the assets (by market value) are in the Largest Accounts, so this analysis is primarily indicative of shifts in this account tier. The size of the AP Universe grew by 15.9% over this period, through the addition of new RIAs and new accounts.
Some of the significant trends occurring during this period include:
-
Asset allocation by asset class showed a 1.4% decline in the equity portion (including US and non-US equities), roughly offset by a 1.5% increase in the fixed income allocation. During this period the Dow declined by 5.1%, from 13,521 to 12,861. This indicates that RIAs did not make any significant changes to overall asset allocations, by asset class, during this time period.
-
Approximately 2% of assets were shifted out of the US markets, and allocations to foreign markets grew by 1.7%. This is a continuation of a trend that we noted in our May 27 analysis. Within foreign equities, there was a dramatic shift out of foreign developed markets (-15.2%) and into foreign emerging markets (+15.2%). The majority of these assets went into foreign emerging large cap value stocks, which saw an increase in allocation from 7.2% to 70.3% (among foreign emerging equities).
-
Within the US equity markets, we noted on May 27 that assets were shifting out of large cap and into mid and small cap. This trend continued, albeit less dramatically, with large cap stocks declining by.1%, mid caps declining by .9%, and small caps increasing by 1%. On a similar note, the trend out of value (-1.8%) and into core (1.3%) and growth (.5%) continued.
-
In the fixed income markets, there was a shift out of municipal bonds (-4.0%) and into corporate/taxable bonds (+6.1%). Most notably, there were was a flight to quality, with RIAs shortening their maturities and moving to bonds with higher ratings. Investment grade corporate/taxable allocations grew by 3.6%, while medium grade allocations declined by 3.5%. A similar movement was seen in municipal bonds, where investment grade allocations grew by 1.7%, with medium grade allocations declining by 1% and high yield allocations declining by .7%. In both corporate/taxable bonds and municipal bonds, RIAs shortened their maturities, shifting out of medium and long term bonds and into shorter term bonds. Similar patterns are evident in the allocations within foreign bonds.
The tables below show the complete data for the AP Universe for the period from 5/27/08 to 8/15/08.
Asset Class |
05/27/07 |
|
8/15/2007 |
|
Change |
Bonds |
10,082,003,352 |
27.7% |
12,327,801,143 |
29.2% |
1.5% |
Cash |
3,062,506,925 |
8.4% |
3,335,977,511 |
7.9% |
-0.5% |
Equities |
23,114,480,013 |
63.5% |
26,193,490,478 |
62.1% |
-1.4% |
Other |
156,004,629 |
0.4% |
334,374,384 |
0.8% |
0.4% |
|
36,414,994,919 |
|
42,191,643,516 |
|
15.9% |
Domicile |
05/27/07 |
|
8/15/2007 |
|
Change |
Cash |
3,062,506,925 |
8.4% |
3,335,977,511 |
7.90% |
-0.5% |
Foreign |
3,569,149,103 |
9.8% |
4,843,108,856 |
11.50% |
1.7% |
Unknown |
3,778,101,804 |
10.4% |
4,740,078,185 |
11.20% |
0.8% |
US |
26,005,237,087 |
71.4% |
29,272,478,964 |
69.40% |
-2.0% |
|
36,414,994,919 |
|
42,191,643,516 |
|
15.9% |
Non-US Assets |
05/27/07 |
|
8/15/2007 |
|
Change |
Foreign Developed Equities |
3,153,771,943 |
88.4% |
3,543,475,452 |
73.2% |
-15.2% |
Foreign Emerging Equities |
312,270,103 |
8.7% |
1,158,368,740 |
23.9% |
15.2% |
Foreign Bonds |
103,107,057 |
2.9% |
141,264,664 |
2.9% |
0.0% |
|
3,569,149,103 |
|
4,843,108,856 |
|
35.7% |
US Equities by Market Cap |
05/27/07 |
|
8/15/2007 |
|
Change |
Large Cap |
11,832,441,536 |
65.3% |
12,638,796,390 |
65.20% |
-0.1% |
Mid Cap |
3,829,350,048 |
21.1% |
3,913,900,657 |
20.20% |
-0.9% |
Small Cap |
2,463,320,024 |
13.6% |
2,823,814,293 |
14.60% |
1.0% |
|
18,125,111,608 |
|
19,376,511,340 |
|
6.9% |
US Equities by Style |
05/27/07 |
|
8/15/2007 |
|
Change |
Value |
2,502,927,225 |
13.8% |
2,315,864,213 |
12.00% |
-1.8% |
Blend |
10,096,236,933 |
55.7% |
11,047,821,583 |
57.00% |
1.3% |
Growth |
5,525,947,450 |
30.5% |
6,012,825,544 |
31.00% |
0.5% |
|
18,125,111,608 |
|
19,376,511,340 |
|
6.9% |
US Equities by Cap/Style |
05/27/07 |
|
8/15/2007 |
|
Change |
Large Cap Value |
1,561,436,203 |
8.6% |
1,429,928,969 |
7.40% |
-1.2% |
Large Cap Blend |
7,137,184,779 |
39.4% |
7,848,342,233 |
40.50% |
1.1% |
Large Cap Growth |
3,133,820,554 |
17.3% |
3,360,525,188 |
17.30% |
0.0% |
Mid Cap Value |
410,149,574 |
2.3% |
364,200,992 |
1.90% |
-0.4% |
Mid Cap Blend |
1,728,872,900 |
9.5% |
1,841,089,502 |
9.50% |
0.0% |
Mid Cap Growth |
1,690,327,574 |
9.3% |
1,708,610,163 |
8.80% |
-0.5% |
Small Cap Value |
531,341,448 |
2.9% |
521,734,252 |
2.70% |
-0.2% |
Small Cap Blend |
1,230,179,254 |
6.8% |
1,358,389,848 |
7.00% |
0.2% |
Small Cap Growth |
701,799,322 |
3.9% |
943,690,193 |
4.90% |
1.0% |
|
18,125,111,608 |
|
19,376,511,340 |
|
6.9% |
Foreign Developed Equities by Market Cap |
05/27/07 |
|
8/15/2007 |
|
Change |
Large Cap |
2,902,876,972 |
92.0% |
3,289,856,803 |
92.80% |
0.8% |
Mid Cap |
180,108,014 |
5.7% |
157,122,586 |
4.40% |
-1.3% |
Small Cap |
70,786,957 |
2.2% |
96,496,063 |
2.70% |
0.5% |
|
3,153,771,943 |
|
3,543,475,452 |
|
12.4% |
Foreign Developed Equities by Style |
05/27/07 |
|
8/15/2007 |
|
Change |
Value |
637,628,654 |
20.2% |
680,913,245 |
19.20% |
-1.0% |
Blend |
1,952,423,309 |
61.9% |
2,282,564,394 |
64.40% |
2.5% |
Growth |
563,719,980 |
17.9% |
579,997,813 |
16.40% |
-1.5% |
|
3,153,771,943 |
|
3,543,475,452 |
|
12.4% |
Foreign Developed Equities by Cap/Style |
05/27/07 |
|
8/15/2007 |
|
Change |
Large Cap Value |
528,943,198 |
16.8% |
548,675,914 |
15.50% |
-1.3% |
Large Cap Blend |
1,860,265,471 |
59.0% |
2,218,776,853 |
62.60% |
3.6% |
Large Cap Growth |
513,668,303 |
16.3% |
522,404,036 |
14.70% |
-1.6% |
Mid Cap Value |
68,724,269 |
2.2% |
79,902,979 |
2.30% |
0.1% |
Mid Cap Blend |
82,256,557 |
2.6% |
50,219,212 |
1.40% |
-1.2% |
Mid Cap Growth |
29,127,188 |
0.9% |
27,000,395 |
0.80% |
-0.1% |
Small Cap Value |
39,961,187 |
1.3% |
52,334,352 |
1.50% |
0.2% |
Small Cap Blend |
9,901,281 |
0.3% |
13,568,329 |
0.40% |
0.1% |
Small Cap Growth |
20,924,489 |
0.7% |
30,593,382 |
0.90% |
0.2% |
|
3,153,771,943 |
|
3,543,475,452 |
|
12.4% |
Foreign Emerging Equities by Market Cap |
05/27/07 |
|
8/15/2007 |
|
Change |
Large Cap |
288,400,614 |
92.4% |
1,128,032,958 |
97.40% |
5.0% |
Mid Cap |
9,623,082 |
3.1% |
16,736,764 |
1.40% |
-1.7% |
Small Cap |
14,246,407 |
4.6% |
13,599,018 |
1.20% |
-3.4% |
|
312,270,103 |
|
1,158,368,740 |
|
271.0% |
Foreign Emerging Equities by Style |
05/27/07 |
|
8/15/2007 |
|
Change |
Value |
29,936,499 |
9.6% |
819,595,814 |
70.80% |
61.2% |
Blend |
188,633,300 |
60.4% |
248,758,653 |
21.50% |
-38.9% |
Growth |
93,700,304 |
30.0% |
90,014,273 |
7.80% |
-22.2% |
|
312,270,103 |
|
1,158,368,740 |
|
271.0% |
Foreign Emerging Equities by Cap/Style |
05/27/07 |
|
8/15/2007 |
|
Change |
Large Cap Value |
22,516,591 |
7.2% |
814,831,136 |
70.30% |
63.1% |
Large Cap Blend |
186,620,248 |
59.8% |
235,416,787 |
20.30% |
-39.5% |
Large Cap Growth |
79,263,775 |
25.4% |
77,785,035 |
6.70% |
-18.7% |
Mid Cap Value |
4,205,401 |
1.3% |
1,160,284 |
0.10% |
-1.2% |
Mid Cap Blend |
1,406,143 |
0.5% |
12,367,704 |
1.10% |
0.6% |
Mid Cap Growth |
4,011,538 |
1.3% |
3,208,776 |
0.30% |
-1.0% |
Small Cap Value |
3,214,507 |
1.0% |
3,604,394 |
0.30% |
-0.7% |
Small Cap Blend |
606,909 |
0.2% |
974,162 |
0.10% |
-0.1% |
Small Cap Growth |
10,424,991 |
3.3% |
9,020,462 |
0.80% |
-2.5% |
|
312,270,103 |
|
1,158,368,740 |
|
271.0% |
Bonds by Type |
05/27/07 |
|
8/15/2007 |
|
Change |
Corporate |
4,617,775,101 |
45.8% |
6,394,998,117 |
51.90% |
6.1% |
Foreign |
103,107,057 |
1.0% |
141,264,664 |
1.10% |
0.1% |
Municipal |
3,262,350,378 |
32.4% |
3,500,969,507 |
28.40% |
-4.0% |
Unknown |
2,098,770,816 |
20.8% |
2,290,568,855 |
18.60% |
-2.2% |
|
10,082,003,352 |
|
12,327,801,143 |
|
22.3% |
Corporate Bonds by Maturity |
05/27/07 |
|
8/15/2007 |
|
Change |
Short Term |
2,447,979,077 |
53.0% |
3,607,928,660 |
56.40% |
3.4% |
Medium Term |
1,210,095,274 |
26.2% |
1,596,760,962 |
25.00% |
-1.2% |
Long Term |
959,700,750 |
20.8% |
1,190,308,495 |
18.60% |
-2.2% |
|
4,617,775,101 |
|
6,394,998,117 |
|
38.5% |
Corporate Bonds by Quality |
05/27/07 |
|
8/15/2007 |
|
Change |
Investment Grade |
3,607,814,667 |
78.1% |
5,226,848,094 |
81.70% |
3.6% |
Medium Grade |
972,658,431 |
21.1% |
1,128,621,456 |
17.60% |
-3.5% |
High Yield |
37,302,003 |
0.8% |
39,528,567 |
0.60% |
-0.2% |
|
4,617,775,101 |
|
6,394,998,117 |
|
38.5% |
Corporate Bonds by Maturity/Quality |
05/27/07 |
|
8/15/2007 |
|
Change |
Short Term Investment Grade |
2,120,991,151 |
45.9% |
3,234,443,872 |
50.60% |
4.7% |
Short Term Medium Grade |
326,987,926 |
7.1% |
373,484,788 |
5.80% |
-1.3% |
Medium Term Investment Grade |
876,477,053 |
19.0% |
1,203,383,706 |
18.80% |
-0.2% |
Medium Term Medium Grade |
333,618,221 |
7.2% |
393,377,256 |
6.20% |
-1.0% |
Long Term Investment Grade |
610,346,463 |
13.2% |
789,020,516 |
12.30% |
-0.9% |
Long Term Medium Grade |
312,052,284 |
6.8% |
361,759,412 |
5.70% |
-1.1% |
Long Term High Yield |
37,302,003 |
0.8% |
39,528,567 |
0.60% |
-0.2% |
|
4,617,775,101 |
|
6,394,998,117 |
|
38.5% |
Muni Bonds by Maturity |
05/27/07 |
|
8/15/2007 |
|
Change |
Short Term |
907,982,329 |
27.8% |
988,396,089 |
28.20% |
0.4% |
Medium Term |
986,171,646 |
30.2% |
1,070,987,739 |
30.60% |
0.4% |
Long Term |
1,368,196,403 |
41.9% |
1,441,585,679 |
41.20% |
-0.7% |
|
3,262,350,378 |
|
3,500,969,507 |
|
7.3% |
Muni Bonds by Quality |
05/27/07 |
|
8/15/2007 |
|
Change |
Investment Grade |
2,675,628,087 |
82.0% |
2,930,697,778 |
83.70% |
1.7% |
Medium Grade |
381,879,180 |
11.7% |
375,325,259 |
10.70% |
-1.0% |
High Yield |
204,843,111 |
6.3% |
194,946,470 |
5.60% |
-0.7% |
|
3,262,350,378 |
|
3,500,969,507 |
|
7.3% |
Muni Bonds by Maturity/Quality |
05/27/07 |
|
8/15/2007 |
|
Change |
Short Term Investment Grade |
770,587,595 |
23.6% |
842,305,746 |
24.10% |
0.5% |
Short Term Medium Grade |
137,394,734 |
4.2% |
146,090,343 |
4.20% |
0.0% |
Medium Term Investment Grade |
835,549,283 |
25.6% |
924,838,792 |
26.40% |
0.8% |
Medium Term Medium Grade |
150,622,363 |
4.6% |
146,148,947 |
4.20% |
-0.4% |
Long Term Investment Grade |
1,069,491,209 |
32.8% |
1,163,553,240 |
33.20% |
0.4% |
Long Term Medium Grade |
93,862,083 |
2.9% |
83,085,969 |
2.40% |
-0.5% |
Long Term High Yield |
204,843,111 |
6.3% |
194,946,470 |
5.60% |
-0.7% |
|
3,262,350,378 |
|
3,500,969,507 |
|
7.3% |
Foreign Bonds by Maturity |
05/27/07 |
|
8/15/2007 |
|
Change |
Short Term |
19,846,925 |
19.2% |
20,972,573 |
14.80% |
-4.4% |
Medium Term |
61,013,071 |
59.2% |
97,158,882 |
68.80% |
9.6% |
Long Term |
22,247,061 |
21.6% |
23,133,209 |
16.40% |
-5.2% |
|
103,107,057 |
|
141,264,664 |
|
37.0% |
Foreign Bonds by Quality |
05/27/07 |
|
8/15/2007 |
|
Change |
Investment Grade |
66,092,573 |
64.1% |
106,462,156 |
75.40% |
11.3% |
Medium Grade |
29,263,264 |
28.4% |
18,908,371 |
13.40% |
-15.0% |
High Yield |
7,751,220 |
7.5% |
15,894,137 |
11.30% |
3.8% |
|
103,107,057 |
|
141,264,664 |
|
37.0% |
Foreign Bonds by Maturity/Quality |
05/27/07 |
|
8/15/2007 |
|
Change |
Short Term Investment Grade |
19,846,925 |
19.2% |
20,972,573 |
14.80% |
-4.4% |
Medium Term Investment Grade |
34,783,731 |
33.7% |
81,297,775 |
57.50% |
23.8% |
Medium Term Medium Grade |
26,229,340 |
25.4% |
15,861,107 |
11.20% |
-14.2% |
Long Term Investment Grade |
11,461,917 |
11.1% |
4,191,808 |
3.00% |
-8.1% |
Long Term Medium Grade |
3,033,924 |
2.9% |
3,047,264 |
2.20% |
-0.7% |
Long Term High Yield |
7,751,220 |
7.5% |
15,894,137 |
11.30% |
3.8% |
|
103,107,057 |
|
141,264,664 |
|
37.0% |
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