Fund Supermarkets In The Us 2007

Introduction

Fund supermarkets in the US 2007 examines developments in the US fund supermarket sector and assesses the distribution channels that are in operation. The report analyzes both the current and possible future trends of the industry.

Scope

• Sizes the investment funds market and provides forecasts up to 2011.
• Reviews relevant legislative developments and their implications for fund distribution through supermarkets.
• Profiles leading fund supermarkets in the US.

Highlights

In 2001, mutual fund purchases by distribution channel were approximately 48% through retirement plans, 37% through sales force outlets such as brokers, financial advisors, and insurance brokers, 10% by direct sales by funds, and 5% through fund supermarkets.

The increase in retirement plans has led to an increase in the use of fund supermarkets. Many online brokers offer their own retirement plans, while investors who use an independent financial advisor for their retirement needs will often find that the advisors themselves use fund supermarkets as an efficient means of fund purchase and management.

Fidelity is the leading US fund supermarket, offering a total of around 4,600 funds, from around 420 host suppliers including Fidelity itself. The Fidelity.com site offers approximately 222 Fidelity funds, segmented into approximately 60% stock funds, 25% bond funds, 10% international funds, and 5% money market funds.

Reasons to Purchase

• Get an overview of the scope of the investment fund market, including past growth and future growth.
• Analyze the offerings of key providers in the sector.
• Use our analysis to inform fund marketing and distribution strategies and adapt to changes in the fund supermarket model.

• Overview
• Catalyst
• Summary
• Executive Summary
  • Mutual funds were the largest segment of the US retail savings and investment market in 2006, representing 39% of the total; fund supermarkets account for a growing proportion of mutual fund sales
  • The market size for US mutual funds has remained steady at around one third of the US retail savings and investments market since 2002
  • The US dominates the global market for mutual funds
  • Stock funds dominated the US mutual fund market in 2006
  • The average US fund supermarket customer is middle-aged with an above-average income
  • Mutual funds are among the most strictly regulated financial products in the US
  • Fidelity is the leading US fund supermarket
  • TD Ameritrade supplies funds solely from external suppliers
  • TD Ameritrade also offers a certain level of portfolio guidance
  • Charles Schwab is one of the largest fund providers in the US
  • FolioFn is a smaller service than its competitors
  • Fees and charges have been driven down by competition
• Table of tables
  • Distribution Dynamics
  • The market size for US mutual funds has remained steady at around one third of the US retail savings and investment market since 2002
  • Mutual funds were the largest segment of the US retail savings and investment market in 2006, accounting for 39% of the total
  • Retail mutual funds accounted for almost 90% of the US mutual fund market in 2006
  • Equity funds dominate the US retail mutual fund market
  • The US dominates the global market for mutual funds
  • Investor demand is increasing
  • Multiple distribution channels have increased competition
  • Fund supermarkets have seen significant growth
  • Fund supermarkets have a number of distinct advantages
  • Stock funds dominated the US mutual fund market share in 2006
  • Retirement plans are the fastest-growing mutual fund purchase source in the US
  • Hybrid mutual fund sales fell between 2005 and 2006, but all other classes saw a rise in new sales
  • The average US fund supermarket customer is middle-aged with an above-average income
  • 84% of US households have an income below USD100, 000
  • Around a third of households with an income of USD100, 000 or more own mutual funds
  • The number of US households owning mutual funds has remained stable over the past 6 years
  • The number of US individuals holding mutual funds has increased by 5 million since 2000
  • The number of fund-owning households with internet access has grown by around 42% since 2000
  • Almost 80% of fund-owning households with internet access used the internet for a financial purpose in 2006
  • Distribution Forecasts
  • Retail mutual funds will continue to account for around 40% of the total US retail savings and investments market for the next 5 years
  • Regulatory climate
  • Mutual funds are one of the most strictly regulated products in the US
  • The Mutual Fund Transparency Act of 2005 aimed to increase disclosure
  • There have recently been calls for further mutual fund disclosure
  • The US is cracking down on online systems failures
  • Distributor Profiles
  • Fidelity is the leading US fund supermarket
  • Fidelity offers one of the widest ranges of funds
  • Fidelity's charging structure for non-Fidelity funds is higher than some other discount brokerage sites
  • Fidelity offers a wide range of core services
  • In addition, Fidelity offers flagship Asset Management services
  • Fidelity is a successful private business
  • The Fidelity website offers high functionality
  • Fidelity has a separate website for advisors
  • TD Ameritrade supplies funds solely from external suppliers
  • TD Ameritrade offers some of the highest quantities of funds
  • TD Ameritrade offers a competitive fee structure
  • TD Ameritrade offers a range of basic trading services
  • The site offers a multitude of additional services
  • TD Ameritrade also offers a certain level of portfolio guidance
  • TD Ameritrade is owned by Ameritrade Holding Corporation
  • TD Ameritrade is directed at the mass market
  • TD Ameritrade offers fewer options of account structures than some of its competitors
  • Opening an account is extremely simple
  • Charles Schwab is one of the largest fund providers in the US
  • Charles Schwab offers some of the highest quantities of funds through its online brokerage
  • Schwab does not charge fees on its own funds
  • Schwab offers a wide range of core services
  • Charles Schwab offers a number of additional services including a detailed portfolio service
  • Schwab Portfolios are designed for diversification
  • Schwab MarketTrack Portfolios are designed to match investor tolerance for risk
  • Charles Schwab provides a full range of financial services
  • Schwab.com is extremely user-friendly
  • Schwab offers a specialist service for advisors
  • Opening an account with Schwab is easy
  • FolioFn is a smaller service than its competitors
  • FolioFn offers far fewer funds than the larger brokers
  • FolioFn offers extremely competitive pricing
  • FolioFn offers a number of core brokerage services
  • FolioFn offers a particular type of service based around its proprietary Folio products.
  • FolioFn operates as an independent company
  • FolioFn's internet functionality is limited by its size
  • FolioFn has developed a new tool for intermediaries
  • FolioFn is one of the easiest accounts to open online
  • Fees and charges have been driven down by competition
  • Fund supermarkets reduce the burden of fees on mutual fund companies
• Appendix
  • Definitions
  • Brokerage Firms
  • Fund Supermarkets
  • Mutual Funds
  • Online Broker Ratings/Rankings
  • Prospectus
  • Methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
• List of Tables
  • Table 1: Overview of the retail savings and investments market in the US 2001-2006
  • Table 2: Total mutual funds under management segmented by investor
  • Table 3: Retail mutual funds under management segmented by type of fund
  • Table 4: Principal features of mutual fund distribution channels in the US
  • Table 5: Total Net Assets of Mutual Funds in the US, December 2005-2006
  • Table 6: Share of Mutual Fund Assets by distribution channel in percentages, 2002
  • Table 7: Net New Cash Flow of Long-Term Funds in the US, December 2005-2006
  • Table 8: Income ranges in the US per household, 2006
  • Table 9: Percentage distribution of households owning mutual funds and all U.S. households, by income, 2006
  • Table 10: Number and Percent of US Households owning mutual funds, 2000-2006
  • Table 11: Individual US Investors owning mutual funds
  • Table 12: Number and percent of fund-owning households with Internet access
  • Table 13: Percent of fund-owning and non-fund-owning households with Internet access, by online activities in past 12 months, 2006
  • Table 14: US retail savings and investment balances forecasted 2007-2011, segmented by broad product line
  • Table 15: Some Leading US Fund Supermarkets at a Glance
  • Table 16: Fidelity short-term trading fees
  • Table 17: Fidelity Target Asset Mix by portfolio allocation
  • Table 18: Fidelity Target Asset mix by historic returns
  • Table 19: Range of available Fidelity.com accounts
  • Table 20: TD Ameritrade fee structure
  • Table 21: Amerivest portfolio guidance
  • Table 22: Funds offered by Charles Schwab, by segment
  • Table 23: Charles Schwab fee structure
  • Table 24: Schwab account minimum balance requirements
  • Table 25: Schwab portfolios
  • Table 26: Schwab portfolios by stock allocation
  • Table 27: Schwab portfolios by historic return
  • Table 28: Schwab MarketTrack portfolios by stock allocation
  • Table 29: FolioFn Pricing Structures
  • Table 30: FolioFn Service fee structure
  • Table 31: FolioFn product range