Products & Services Research Report Series Investable Assets: Mutual Funds Still Dominating the Business April 2011
TABLE OF CONTENTS INTRODUCTION, KEY FINDINGS, & EXECUTIVE SUMMARY...24 EVOLUTION OF THE INVESTABLE ASSETS MARKET...94 Market History...94 Early Phase...94 Middle Phase...94 Recent Phase...94 Market Definition...94 Cash Investments...94 Individual Securities & Capital Markets...94 Mutual Funds...94 Fee-Accounts...94 ETFs & Indexing...94 Hedge Funds...94 Venture Capital & Private Equity...94 Real Estate...95 Wine Investments...95 Other Financial Alternative Investments...95 Other Non-Financial Alternative Investments...95 Market Growth...95 Firms...95 Employees...95 Clients...95 Assets Under Management...96 Revenues...96 Net Profits...96 Leading Financial Product Firms...96 Employees...96 Clients...96 Assets Under Management...96 Revenues...96 Net Profits...96 MARKET SEGMENTATION...97 Cash Investments & Bank Savings Products...97 Evolution of Cash Investments & Bank Savings Products...97 Market History...97 Early Phase...97 Innovation Phase...97 Restructuring Phase...97 Market Definition...97 Cash Investments...98 Bank Savings Products...98 Market Growth...98 Firms...98 Accounts...98 Assets Under Management...98 Net Flows...98 Revenues...99 11.04.01 Investable Assets 2
Net Profits...99 Leading Cash Investments & Bank Savings Products Companies...99 Accounts...99 Assets Under Management...99 Net Flows...99 Revenues...99 Net Profits...99 Market Segmentation...99 Cash Investments...100 Bank Savings Products...101 Markets & Distribution Channels...102 Direct Distribution...102 Online Financial Services...102 Financial Advisor Markets...102 Retail Banks...102 Full-Service Brokerage...102 Fee-Based Financial Advisors...102 Other Financial Advisors...102 Life Insurance Companies & Agencies...102 CPA Firms...103 Property & Casualty Insurance Agents...103 Mortgage Brokers...103 Upscale Channels...103 Private Banks...103 Money Managers...103 Investment Banks...103 Sports Agents & Entertainment Managers...103 Other Boutique & Upscale Firms...103 Institutional Markets...103 Defined Contribution Plans...103 Defined Benefit Plans...103 Endowments & Foundations...103 Corporate Cash & Treasury Services...103 Sovereign Wealth Funds & Other Foreign Investors...104 International Markets...104 English Speaking Countries Markets...104 Europe, Middle East, & Africa Markets...104 Asia Pacific Markets...104 Latin America Markets...104 Offshore Markets...104 Future Predictions for Cash Investments & Bank Savings Products...104 Slow Decline of Money Market Funds & Shift Back to Bank Savings Products..104 Continued Evolving Product Structure Shifts...104 Increasing Importance of Direct Distribution & Institutional Channels...104 Individual Securities & Capital Markets... 104 Evolution of the Individual Securities & Capital Markets Industry...105 Market History...105 Early Phase...105 Middle Phase...105 Recent Phase...105 Market Definition...105 11.04.01 Investable Assets 3
Securities Exchanges...105 Specialists...105 Market Makers...105 Electronic Communication Networks (ECNs)...105 Technology & Data Service Providers...105 Market Growth...106 Firms...107 Revenues...107 Net Profits...107 Leading Individual Securities & Capital Markets Firms...107 Revenues...107 Net Profits...107 Market Segmentation...107 Securities Exchanges...108 Specialists...108 Market Makers...108 Electronic Communication Networks (ECNs)...108 Technology & Data Service Providers...108 Markets & Distribution Channels...108 Direct Distribution...108 Financial Advisor Markets...108 Institutional Markets...108 International Markets...108 Future Predictions for Individual Securities & Capital Markets...109 Impact of Switch to T+1 Settlement...109 Impact of the Switch to Decimalization...109 Emergence of After-Hours Electronic Trading...109 Directed Brokerage & Soft Dollar Practices Under Attack...109 Leveraging Portfolios through Securities Lending...109 Technology Leading to Cost Reductions in Trade Execution...109 Mutual Funds... 109 Evolution of the Mutual Funds Business...109 Key Driving Factors...109 Market History...109 Formation Phase...109 Early Expansion Phase...109 More Rapid Expansion Phase...109 Scandals & Commoditization Phase...110 Market Definition...110 Open-End Mutual Funds...110 Closed-End Mutual Funds...110 Unit Investment Trusts...110 Exchange Traded Funds...110 Market Growth...110 Companies...110 Partners...111 Employees...111 Consumers (Investors)...111 Consumer Households...111 Accounts...111 Assets Under Management...111 11.04.01 Investable Assets 4
Net Flows...111 Revenues...111 Net Profits...111 Leading Mutual Fund Companies...111 Mutual Funds...111 Assets Under Management...111 Net Flows...112 Revenues...112 Net Profits...112 Market Segmentation...112 Open-End Mutual Funds...112 Key Issues...112 Decreasing Investment Minimums...112 Decreasing Fees...112 Brokerage Firms Shift from Money Market Funds...112 Decreasing Redemption Rates...112 Increasing Compliance...113 Increasing Technology Innovations...113 Mutual Fund Mergers & Acquisitions...113 Evolving Independent Board Member Roles...113 Closed-End Mutual Funds...114 Unit Investment Trusts...114 Non-US Mutual Funds...114 Sub-Market Segmentation...114 Investment Style...114 Stocks, Bonds, & Money Market Funds...114 Growth & Value...114 Various Fixed Income...114 International Funds...114 Target Date Funds...115 Index Funds...115 Leveraged Funds...115 Inverse Funds...115 Hedge Fund Strategies...115 Sector Funds...115 Real Estate Funds...115 Commodity Funds...115 Currency Funds...115 Focused Mutual Funds...115 Socially Responsible Funds...116 Tax Efficient Funds...116 Product Structures...116 Closed-End Funds...116 Unit Investment Trusts...116 Share Classes...116 Mutual Funds-of-Funds...116 Mutual Funds Wrap Accounts...116 Unified Managed Accounts...117 Performance Fee Mutual Funds...117 Sub-Advised Funds...117 Markets & Distribution Channels...117 11.04.01 Investable Assets 5
Direct Distribution...117 Direct to Consumer...117 Discount Brokers & Mutual Fund Supermarkets...117 Discount Brokers...117 Mutual Fund Supermarkets...118 Financial Advisor Markets...118 Commission Mutual Fund Sales...118 Mutual Fund Wrap Account Programs...118 Fee-Based Financial Advisors...118 Independent Reps...119 Turnkey Asset Management Programs...119 Retail Banks...120 Insurance Agents...120 CPA Firms...120 Institutional Markets...120 401k Plans...120 403b Plans...121 457 Plans...121 Sub-Advisory Opportunities...121 International Markets...121 English Speaking Countries...121 Europe, Middle East, & Africa Countries...121 Asia Pacific Countries...121 Latin America Countries...121 Offshore Countries...121 Future Predictions for Mutual Funds...121 Increased Compliance...121 Mutual Fund Scandals...121 Moderate Industry Growth...121 Interesting Investment Style Shifts...121 Slower than Expected Exit from Equity Mutual Funds...122 Exit from Money Market Funds...122 Increased International Focus...122 Evolving Investment Styles...122 Increased Utilization of Target Date Mutual Funds...122 Increased Utilization of Index Funds...122 Introduction to Leveraged Index Funds...122 Introduction to Inverse Index Funds...122 Increased Utilization of Mutual Funds with Hedge Fund Strategies...122 Emergence of Sector Mutual Funds...122 Introduction of Real Estate Mutual Funds...122 Emergence of Commodity Funds...123 Emergence of Currency Funds...123 Emergence of Socially Responsible Investing Mutual Funds...123 Increased Utilization of Tax Efficient Mutual Funds...123 Evolving Product Structures...123 Expansion of Share Classes...123 Increased Utilization of Closed-End Funds...123 Increased Utilization of Funds-of-Funds...123 Increased Utilization of Mutual Fund Wrap Account Programs...123 Increased Exposure of Unified Managed Account Programs...123 11.04.01 Investable Assets 6
Growing Popularity of Performance Fees...123 Evolving Markets & Distribution Channels...123 Increasing Importance of Distribution Networks...123 Opportunities in the International Market...123 Evolving Wholesaler Models...123 Brand Building...124 Intellectual Wholesaling...124 Increased Telephone & Virtual Wholesaling Strategies...124 Distancing of the Leaders...124 Bifurcation of the Industry...124 Increased Focus on Value...124 Consolidation of Mutual Fund Companies...124 Large Company Market...124 Mid-Size Company Market...125 Small Company Market...125 Mutual Fund Company Initial Public Offerings...125 Fee-Accounts... 125 Evolution of the Separately Managed Accounts & Other Packaged Fee-Account Programs Business...125 Key Driving Factors...125 Fees Versus Commissions...125 Fiduciary Responsibility...125 Market History...125 Commissions Dominate Retail Business...125 Introduction But Slow Growth...125 Explosive Growth in Fee-Accounts...126 Recasting of Fee-Accounts...126 Market Definition...126 Proprietary Fee-Account Programs...126 TAMPs...126 Fee-Based Financial Advisors...126 Bank Trust Departments...126 Separate Account Managers...126 Market Growth...126 Packaged Fee-Account Sponsors...126 Packaged Fee-Account Programs...126 Packaged Fee-Account Clients...126 Packaged Fee-Accounts Accounts...126 Packaged Fee-Account Net Flows...126 Packaged Fee-Account Revenues...126 Packaged Fee-Account Net Profits...127 Leading Fee-Account Program Sponsors (Proprietary & TAMPs)...127 Packaged Fee-Account Clients...127 Packaged Fee-Accounts...127 Packaged Fee-Account Assets Under Management...127 Packaged Fee-Account Net Flows...127 Packaged Fee-Account Revenues...127 Packaged Fee-Account Profits...127 Market Segmentation...127 Proprietary Fee-Account Programs...127 Turnkey Asset Management Programs...127 11.04.01 Investable Assets 7
Widespread Market Consolidation...128 Explosive Assets Growth...128 Intense Market Concentration...128 Products Usage (Mutual Funds & Separately Managed Accounts)...128 Product Segmentation...128 Separately Managed Accounts...128 Market Growth...128 Leading Separately Managed Account Program Sponsors...129 Multiple Style Portfolios...129 Market Growth...129 Leading Multiple Style Portfolio Program Sponsors...129 Mutual Fund Wrap Accounts...129 Market Growth...129 Leading Mutual Fund Wrap Account Program Sponsors...130 Annuity Wrap Accounts...130 Market Growth...130 Leading Annuity Wrap Account Program Sponsors...130 ETF Wrap Accounts...130 Market Growth...130 Leading ETF Wrap Account Program Sponsors...131 Unified Managed Accounts...131 Market Growth...131 Leading Unified Managed Account Program Sponsors...131 Broker Wrap Accounts...131 Market Growth...131 Leading Broker Wrap Account Program Sponsors...131 Fee-Based Brokerage Accounts...132 Market Growth...132 Leading Fee-Based Brokerage Account Program Sponsors...132 Markets & Distribution Channels...132 Wirehouses...132 Other Financial Advisor Channels...132 Independent Broker/Dealers...132 Market Background...132 Fees Orientation...132 TAMP Usage...133 TAMP Feedback...133 Fee-Based Financial Advisors...133 Market Background...133 Fees Orientation...133 TAMP Usage...133 National, Regional, & Community Banks...133 Market Background...133 Increasing Importance of Fee-Accounts...133 Challenges in Building Fee-Account Programs...134 TAMP Usage...134 Insurance Companies...134 Market Background...134 TAMP Usage...134 CPA & Law Firms...134 Market Background...134 11.04.01 Investable Assets 8
TAMP Usage...135 Other Financial Advisors...135 Upscale Channels...135 Direct Distribution...135 Increasing Advice Offers...135 TAMP Usage...135 Institutional Markets...135 Defined Contribution Plans...135 Defined Benefit Plans...135 Endowments & Foundations...135 Corporate Cash & Treasury Management...135 Sovereign Wealth Funds & Other Foreign Investors...135 International Markets...135 English Speaking Countries Markets...135 Europe, Middle East, & Africa Markets...135 Asia Pacific Markets...136 Latin America Markets...136 Offshore Markets...136 Future Predictions for the Separately Managed Accounts & Other Packaged Fee- Account Programs Business...136 Substantial Expected Growth for Both the Packaged Fee-Accounts & Broader Fee-Accounts Markets...136 Packaged Fee-Accounts Growth Projections...136 Broader Fee-Account Growth Projections...136 Growth in Six of the Eight Types of Fee-Account Programs...136 Separately Managed Accounts...136 Multiple Style Portfolios...137 Mutual Fund Wrap Accounts...137 ETF Wrap Accounts...137 Annuity Wrap Accounts...137 Unified Managed Accounts...137 Broker Wrap Accounts...138 Fee-Based Brokerage Accounts...138 Emerging Distribution Opportunities...138 Wirehouses...138 Regional Broker/Dealers...138 Independent Advisor Markets...138 Banks...139 Discount Brokerage Firms...139 Other Financial Advisors...139 Upscale Channels...139 Expected Process Improvements...139 Front-End Technology...139 Middle-Office Technology...139 Back-End Technology...140 Client Profiling, Asset Allocation, & Proposal Generation...140 Investment Vehicle & Manager Selection...140 Ongoing Monitoring, Rebalancing, Performance Reporting, Billing, & Reallocation...141 Training, Payouts, Operations & Client Support, Technology, & Compliance Issues...141 11.04.01 Investable Assets 9
Potentially New Pricing Models...141 ETFs & Indexing... 141 Evolution of the ETFs & Indexing Industry...141 Key Driving Factors...142 Focus on Modern Portfolio Theory & Asset Allocation...142 Actively Managed Mutual Funds Difficulty in Beating Returns...142 Lower Expense Ratios...142 Less Turnover & More Tax Efficiency...142 The Volatile Stock Market...142 Stock Analysts & Mutual Funds Scandals...143 Market History...143 Indexed Separate Accounts Emergence Phase...143 Index Mutual Funds Emergence Phase...143 Indexing Growth & Product Innovation Phase...143 Exchange Traded Funds Emergence Phase...143 Market Definition...143 Exchange Traded Funds...144 Index Mutual Funds...144 Indexed Separate Accounts...144 Market Growth...144 Number of Companies...144 Number of Products...144 Assets Under Management...144 Net Flows...145 Revenues...145 Net Profits...145 Leading Market-Linked Product Companies...145 Number of Products...145 Assets Under Management...145 Net Flows...146 Revenues...146 Net Profits...146 Market Segmentation...146 Exchange Traded Funds...146 Market Definition...146 Passive...146 Active...146 Market Growth...146 Number of Companies...147 Number of Products...147 Assets Under Management...147 Net Flows...147 Revenues...147 Net Profits...147 Leading Exchange Traded Fund Companies...147 Number of Products...148 Assets Under Management...148 Net Flows...148 Revenues...148 Net Profits...148 Index Mutual Funds...148 11.04.01 Investable Assets 10
Market Definition...148 Index...148 Leverage...149 Diverse...149 Market Growth...149 Number of Companies...149 Number of Products...149 Assets Under Management...149 Net Flows...149 Revenues...150 Net Profits...150 Leading Index Mutual Fund Companies...150 Number of Products...150 Assets Under Management...150 Net Flows...150 Revenues...150 Net Profits...150 Indexed Separate Accounts...151 Market Definition...151 Index...151 Custom...151 Market Growth...151 Number of Companies...151 Assets Under Management...151 Net Flows...151 Revenues...151 Net Profits...151 Leading Indexed Separate Accounts Managers...151 Assets Under Management...152 Net Flows...152 Revenues...152 Net Profits...152 Markets & Distribution Channels...152 Direct Distribution...152 Online Tools & Advice...152 Online Brokerage...152 Online Banking & Mortgages...152 Online Insurance...152 Financial Advisor Markets...152 Retail Banks...153 Full-Service Brokerage Firms...153 Independent Advisors...153 Other Types of Financial Advisors...153 Upscale Channels...153 Institutional Markets...153 Defined Contribution Plans...153 Defined Benefit Plans...153 Endowments & Foundations...153 Other Markets...153 Fee-Accounts & TAMP Programs...153 International Markets...153 11.04.01 Investable Assets 11
English Speaking Countries Markets...153 Europe, Middle East, & Africa Markets...154 Asia Pacific Markets...154 Latin America Markets...154 Offshore Markets...154 Future Predictions for the Market-Linked Products Business...154 Accelerated Growth in Market-Linked Products...154 Market Expansion...154 Product Innovations...155 Continued Dominance of Leading Players & Markets...155 Defense of Three Disadvantages...155 Expansion of Investment Styles & Recent Innovations...155 Investment Styles...155 Recent Innovations...155 Expansion of Five Utilization Strategies...156 Continued Expansion of Exchange Traded Funds...156 Market Expansion...156 Product Innovations...156 Continued Dominance of Leading Players...156 Growth in Index Mutual Funds...156 Market Expansion...157 Four Product Innovations...157 Continued Dominance of Leading Players & Markets...157 Increased Product Innovation in Indexed Separate Accounts...157 Market Expansion...157 Five Product Innovations...157 Continued Dominance of Leading Players & Markets...158 Hedge Funds... 158 Evolution of the Hedge Funds Business...158 Market History...158 Emergence Phase...158 Strategy Diversification Phase...158 High Returns & Initial Collapses Phase...158 Risk Management & Continued Collapses Phase...158 Market Definition...159 US Hedge Funds...159 Managed Futures Funds...159 Hedge Fund Mutual Funds...159 Non-US Hedge Funds...159 Global Hedge Funds...159 Market Growth...159 Hedge Fund Managers...159 Hedge Fund Clients...160 Hedge Fund Accounts...160 Hedge Fund Assets Under Management...160 Hedge Fund Net Flows...160 Hedge Fund Revenues...160 Hedge Fund Net Profits...160 Leading Hedge Fund Companies...161 Hedge Fund Firms...161 Hedge Fund Partners...161 11.04.01 Investable Assets 12
Hedge Fund Employees...161 Hedge Fund Accounts...161 Hedge Fund Assets Under Management...161 Hedge Fund Net Flows...161 Hedge Fund Revenue...161 Hedge Fund Net Profits...161 Product Structures Segmentation...161 US Hedge Funds...161 Managed Futures Funds...165 Hedge Funds-of-Funds...165 Hedge Fund Mutual Funds...165 Non-US Hedge Funds...166 Investment Strategies Segmentation...166 Equity Strategies...166 Arbitrage or Relative Value Strategies...166 Event Driven Strategies...166 Global Macro Strategies...166 Multi-Strategy Funds...167 Markets & Distribution Channels...167 Direct Distribution...167 Financial Advisor Markets...167 Institutional Markets...167 International Markets...168 Future Predictions for the Hedge Funds Business...168 Steady Market Growth & Disproportional Market Impacts...168 Steady Market Growth...168 Disproportional Market Impacts...169 Continual Casualties & Increased Regulation...169 Retailization of Hedge Fund Products...170 Hedge Funds-of-Funds...170 Hedge Fund Index Funds...170 Registered Hedge Funds...170 Hedge Funds in Variable Life Wrappers...171 Opportunities in Defined Benefit & Defined Contribution Plans...171 Institutionalization & Consolidation of the Hedge Funds Business...172 Venture Capital & Private Equity... 173 Evolution of the Venture Capital & Private Equity Businesses...173 Market History...173 Private Equity Hey Day Phase...173 Venture Capital Prominence Phase...173 Private Equity Renewal Phase...173 Market Definition...173 Venture Capital...173 Private Equity...173 Mezzanine Finance...173 Market Growth...173 Venture Capital & Private Equity Firms...173 Venture Capital & Private Equity Funds...173 Venture Capital & Private Equity Fund Flows...174 Venture Capital & Private Equity Fund Assets Under Management...174 Venture Capital & Private Equity Fund Commitments...174 11.04.01 Investable Assets 13
Venture Capital & Private Equity Fund Commitments...174 Key Issues...174 Volatile Initial Public Offering Market...174 Investment Product Polarization...174 Emergence of Indices...174 Emergence of Secondary Market...174 Fees Vary...174 Due Diligence & Manager Selection...175 Liquidity Problems...175 Retailization...175 Larger Funds...175 Internal Rate of Return...175 New Firms Enter Industry...175 Management Strategy...176 Funds-of-Funds...176 Contract Negotiation...176 Performance Reporting...176 Diversification Requirements...176 Leading Venture Capital & Private Equity Firms...176 Venture Capital & Private Equity Funds...176 Venture Capital & Private Equity Fund Net Flows...176 Venture Capital & Private Equity Fund Assets Under Management...176 Venture Capital & Private Equity Fund Commitments...177 Venture Capital & Private Equity Fund Commitments...177 Market Segmentation...177 Venture Capital...177 Market Growth...177 Venture Capital Firms...177 Venture Capital Funds...177 Venture Capital Fund Net Flows...177 Venture Capital Fund Assets Under Management...178 Venture Capital Fund Commitments...178 Venture Capital Fund Commitments...178 Key Issues...178 Entrance of Corporate, State, & University Venture Programs...178 Emergence of High Net Worth Individual Investors...178 Angels & Incubators...178 Angel Investors...179 Online Venture Capital...179 Fund Bifurcation...179 Focus on Late Stage Investments...180 Betrayal of Entrepreneurs...180 Changing Industry Focus...180 Changing Geographical Focus...181 Entering & Exiting Firms...181 Other Specialized Firms...181 Funds Solicitation...181 Internal Rate of Return...181 Mid-Market Deals...182 Firm Roles...182 Leading Venture Capital Firms...182 11.04.01 Investable Assets 14
Venture Capital Funds...182 Venture Capital Net Flows...182 Venture Capital Assets Under Management...183 Venture Capital Commitments...183 Venture Capital Commitments...183 Private Equity...183 Market Growth...183 Private Equity Firms...183 Private Equity Funds...183 Private Equity Fund Net Flows...183 Private Equity Fund Assets Under Management...183 Private Equity Fund Commitments...183 Private Equity Fund Commitments...183 Key Issues...183 Huge Funds Raised...183 Technology & Financial Services Investing Focus...184 Mergers & Acquisitions...184 Internal Rate of Return...184 Diversification...184 Tax Benefits...184 Foreign Institutions...184 Time...185 Turnover...185 Partner Investments...185 Track Record...185 General Partner...185 Workload...185 Portfolio Experience...185 Redemption...185 Investment Requirements...185 Evolving Investments...185 Liquidity...186 Private Equity Firms Offer Venture Capital Funds...186 Secondary Funds...186 Investment Process...186 Geography...186 Big Players Enter Market...187 Fund Structure...187 Market Confidence...187 Leading Private Equity Firms...187 Private Equity Funds...187 Private Equity Fund Net Flows...187 Private Equity Fund Assets Under Management...188 Private Equity Fund Commitments...188 Private Equity Fund Commitments...188 Mezzanine Finance...188 Market Growth...188 Mezzanine Finance Firms...188 Mezzanine Finance Funds...188 Mezzanine Finance Fund Net Flows...189 Mezzanine Finance Fund Assets Under Management...189 11.04.01 Investable Assets 15
Mezzanine Finance Fund Commitments...189 Mezzanine Finance Fund Commitments...189 Key Issues...189 Pressure to Invest...189 Venture-Backed Financing...189 Fund Structure...189 Corporations...189 Repayment...189 Fund Attractiveness...189 Bifurcation...190 Leading Mezzanine Finance Firms...190 Mezzanine Finance Funds...190 Mezzanine Finance Fund Net Flows...190 Mezzanine Finance Fund Assets Under Management...190 Mezzanine Finance Fund Commitments...190 Mezzanine Finance Fund Commitments...190 Markets & Distribution Channels...190 Direct Distribution...191 Financial Advisor Markets...191 Institutional Markets...191 International Markets...191 Future Predictions for the Venture Capital & Private Equity Industry...191 Impressive Industry Growth...191 Evolving Markets & Distribution Channels...193 New Fund Structures...194 Rise of Compliance Issues...194 Evolving Investments...194 Early Signs of Bifurcation...194 Real Estate... 194 Evolution of the Real Estate Investment Business...194 Market History...194 Early Phase...194 Middle Phase...194 Recent Phase...194 Market Definition...195 Pooled Partnerships...195 REITs...195 Mortgage Backed Securities...195 Direct...195 Mutual Funds...195 Market Growth...195 Funds...195 Assets Under Management...196 Revenues...196 Net Profits...196 Key Issues...196 Leading Real Estate Investment Product Companies...196 Funds...197 Assets Under Management...197 Revenues...197 Net Profits...197 11.04.01 Investable Assets 16
Market Segmentation...197 Pooled Partnerships...197 REITs...197 Mortgage Backed Securities...198 Direct...198 Mutual Funds...198 Product Segmentation...198 Traditional Real Estate...198 Timberland...199 Farmland...200 Energy Property Investments...200 Markets & Distribution Channels...201 Direct Distribution...201 Online Tools & Advice...201 Online Banking & Mortgages...201 Online Brokerage...201 Online Insurance...201 Financial Advisor Markets...201 Retail Banks...201 Full-Service Brokerage Firms...201 Discount Brokerage Firms...201 Independent Reps...201 Fee-Based Financial Advisors...201 Other Financial Advisors...201 Upscale Channels...202 Institutional Markets...202 Defined Contribution Plans...202 Defined Benefit Plans...202 Endowments & Foundations...202 Corporate Cash & Treasury Services...202 Sovereign Wealth Funds & Other Foreign Investors...202 International Markets...202 English Speaking Countries Markets...202 Europe, Middle East, & Africa Markets...202 Asia Pacific Markets...202 Latin America Markets...202 Offshore Markets...202 Future Predictions for Real Estate...202 Stagnant Growth in the Real Estate Investments Business...203 Slowed Growth in All Types of Real Estate Investments...203 Emerging Market Opportunities...203 Wine Investments... 203 Evolution of the Wine Industry...203 Market History...203 Early Development Phase...203 Phylloxera Phase...203 US Prohibition & World War II Phase...203 Maturation Phase...204 Business & Consolidation Phase...204 Market Definition...204 California Wineries...204 11.04.01 Investable Assets 17
Other US & Canada Wineries...204 France, Italy, & Other Europe Wineries...204 Other New World Wineries...204 Market Growth...205 Growers...205 Wineries...205 Acres...205 Cases Produced...205 Revenues...205 Net Profits...205 Leading Wineries...206 Acres...206 Cases Produced...206 Revenues...206 Net Profits...206 Grape Varietals Segmentation...206 Red Grape Varietals...207 Barbera...207 Cabernet Franc...207 Cabernet Sauvignon...207 Carignan...207 Charbono...207 Gamay...207 Grenache...207 Malbec...207 Merlot...208 Mourvedre...208 Nebbiolo...208 Petit Verdot...208 Petit Syrah...208 Pinotage...208 Pinot Noir...208 Syrah...208 Sangiovese...208 Tempranillo...209 Zinfandel...209 White Grape Varietals...209 Albarino...209 Chardonnay...209 Chennin Blanc...209 Gewurtzaminer...209 Gruner Veltliner...209 Malvasia Blanco...210 Marsanne...210 Muller-Tyurga...210 Muscat...210 Muscadet...210 Pinot Blanc...210 Pinot Gris (Pinot Grigio)...210 Riesling...210 Rousanne...210 11.04.01 Investable Assets 18
Sauvignon Blanc...210 Semillon...211 Viognier...211 Market Segmentation...211 California Wineries...211 Market Definition...212 Market Growth...212 Wineries...212 Acres...213 Cases Produced...213 Revenues...213 Net Profits...213 Leading California Wineries...213 Acres...213 Cases Produced...213 Revenues...213 Net Profits...213 Market Segmentation...214 Napa Valley...214 Sonoma Valley...214 Mendocino & Lake Counties...214 Livermore Valley & Central Valley...214 Sierra Foothills...214 Marin County...215 Santa Clara & the Santa Cruz Mountains...215 San Luis Obispo County...215 Southern California...215 Other US & Canada Wineries...215 Market Definition...215 Market Growth...216 Wineries...216 Acres...216 Cases Produced...216 Revenues...216 Net Profits...216 Leading Other US & Canadian Wineries...216 Acres...216 Cases Produced...216 Revenues...216 Net Profits...217 Market Segmentation...217 Oregon...217 Washington...218 New York...218 Canada...219 Everything Else...219 France, Italy, & Other European Wineries...220 Market Definition...220 Market Growth...220 Wineries...220 Acres...220 11.04.01 Investable Assets 19
Cases Produced...220 Revenues...221 Net Profits...221 Leading France, Italy, & Other European Wineries...221 Acres...221 Cases Produced...221 Revenues...221 Net Profits...221 Market Segmentation...221 France...222 Italy...222 Germany...222 Spain...222 Portugal...222 Austria...223 Netherlands...223 United Kingdom...223 Other New World Wineries...223 Market Definition...223 Market Growth...224 Wineries...224 Acres...224 Cases Produced...224 Revenues...224 Net Profits...224 Leading Other New World Wineries...224 Acres...224 Cases Produced...225 Revenues...225 Net Profits...225 Market Segmentation...225 Australia...225 New Zealand...225 South Africa...225 South America...225 Markets & Distribution Channels...226 United States...226 Rest of the World...226 Future Predictions for the Wine Industry...226 Emergence of Sauvignon Blanc & Pinot Noir...227 Renewed Growth of High-End Wines...227 Emergence of New World Wineries...227 Streamlining of Distribution...227 Production Careers...227 Distribution Careers...227 Retail Careers...227 Rationalizing of the Industry & Industry Consolidation...227 Opportunities for Investing in the Wine Industry...228 Collections...228 Futures...228 Vineyards...228 11.04.01 Investable Assets 20
Other Financial Alternative Investments... 229 Evolution of Other Financial Alternative Investments...229 Investment Product Polarization...229 Market History...229 Early Phase...229 Middle Phase...229 Recent Phase...229 Market Definition...230 Old-Line Limited Partnerships...230 Stock Market & Individual Stock Options...230 Folios...230 Structured Debt...230 Treasury Inflation Protection Securities (TIPS)...230 Bank Loan Funds...230 Catastrophe Bonds...230 Stable Value & Principal Protected Funds...230 Structured Settlements...230 Commodity & Financial Futures...230 Market Growth...231 Leading Firms...231 Market Segmentation...231 Old-Line Limited Partnerships...231 Stock Market & Individual Stock Options...231 Folios...232 Structured Debt...233 Treasury Inflation Protection Securities (TIPS)...234 Bank Loan Funds...234 Catastrophe Bonds...235 Stable Value & Principal Protected Funds...235 Structured Settlements...235 Commodity & Financial Futures...235 Markets & Distribution Channels...238 Direct Distribution...238 Financial Advisor Markets...239 Institutional Markets...239 International Markets...240 Future Predictions for Other Financial Alternative Investments...240 Other Financial Alternative Investments Will Grow in Popularity...240 Other Non-Financial Alternative Investments... 240 Evolution of Other Non-Financial Alternative Investments...240 Investment Product Polarization...240 Market History...241 Early Phase...241 Middle Phase...241 Recent Phase...241 Market Definition...242 Commodities...242 Fine Art, Antiques, & Collectibles...242 Jewelry & Watches...242 Coins & Stamps...242 Antique & Racing Cars...242 11.04.01 Investable Assets 21
Baseball Cards, Comic Books, & Beer Cans...242 Sports Teams...242 Market Growth...242 Leading Firms...243 Market Segmentation...243 Commodities...243 Fine Art, Antiques, & Collectibles...245 Wine Investments...245 Jewelry & Watches...245 Coins & Stamps...245 Antique & Racing Cars...246 Baseball Cards, Comic Books, & Beer Cans...246 Sports Teams...246 Markets & Distribution Channels...246 Direct Distribution...246 Online Tools & Advice...246 Online Banking & Mortgages...246 Online Brokerage...246 Online Insurance...246 Financial Advisor Markets...246 Retail Banks...246 Full-Service Brokerage Firms...247 Discount Brokerage Firms...247 Independent Reps...247 Fee-Based Financial Advisors...247 Other Financial Advisors...247 Upscale Channels...248 Institutional Markets...248 Defined Contribution Plans...248 Defined Benefit Plans...248 Endowments & Foundations...248 Corporate Cash & Treasury Services...248 Sovereign Wealth Funds & Other Foreign Investors...248 International Markets...248 English Speaking Countries Markets...249 Europe, Middle East, & Africa Markets...249 Asia Pacific Markets...249 Latin America Markets...249 Offshore Markets...249 Future Predictions for Other Non-Financial Alternative Investments...249 Other Non-Financial Alternative Investments Will Grow in Popularity...249 FUTURE PREDICTIONS FOR THE INVESTABLE ASSETS MARKET...251 Mutual Funds to Still Dominate Assets Under Management... 251 Accelerated Growth in Market-Linked Products, Especially in Exchange-Traded Funds251 Increased Usage in Fee-Accounts & Wealth Management Services... 251 APPENDIX...252 Profiles of Financial Product Firms... 252 Profiles of Financial Product Firm Service Providers... 252 11.04.01 Investable Assets 22
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