This is a summary of a panel discussion from the Money Management Institute’s 2012 Spring conference held in Chicago, IL. This is part 2 of 2. You can read Part 1 here.
Moderator: Jay Link, Managing Director, Merrill Lynch
Lorna Sabia, Managing Director, Head of Managed Solutions Group, Merrill Lynch
James Walker, Head of Consulting Group, Morgan Stanley Smith Barney
Matthew Witkos, President, Eaton Vance Distributors. Chairman of MMI.
Is your firm coming out with any new product offerings?
According to Witkos, Eaton Vance has developed a new product that they are calling Exchange Traded Managed Funds. It is like an ETF since it trades like a stock, except without the transparency of an ETF so that the money manager’s intellectual property is protected.
What is the sponsor perspective on mutual fund velocity?
No one wants advisors over-trading mutual funds, Walker commented. Firms look at trade velocity and try to keep it within a certain range, he said. The industry should be more aware of the difference between selling mutual funds individually versus fitting them into a larger portfolio. Walker thinks that market velocity won’t be going away any time soon.
Sabia feels that velocity is a complex topic and more data is needed to determine the impact that it might have on a portfolio. She also stated that she believes that sponsors, advisors and managers all “own” the issue of velocity and everyone should work together to deal with it.