U.S. fixed income was the most popular asset allocation search by investors across the globe in 2014, while demand for equities managers continued to dwindle, said a new report from Mercer.
Mercer said it advised clients on 963 searches in 2014, representing $77.8 billion of assets placed in new allocations. The consultant's 2013 Global Manager Search Trends report, in comparison, covered 760 total searches, with $60.6 billion in total assets placed.
The top asset class for searches in 2014 was U.S. fixed income, at 188 searches. Deb Clarke, global head of investment research at Mercer, said in a news release that the increase in U.S. fixed-income searches occurred largely in the last three months of 2014, “following the high-profile departure of a U.S. fixed-income portfolio manager.” William H. Gross left Pacific Investment Management Co. at the end of September to join Janus Capital Group.
U.S. equities was second, with 89 searches, followed by international multiasset strategies with 74 searches. Global or international equities strategies were searched for on 68 occasions.
Within overall fixed-income searches, non-traditional strategies came to the fore. Multiasset credit searches totaled 24, up from 19 in 2013 and zero in 2012. Unconstrained bond strategies accounted for 15 searches, vs. seven in 2013 and four in 2012. Absolute return accounted for 10 searches, vs. eight in 2013, and 11 in 2012.
Equities continued to fall in popularity, with 317 searches conducted in 2014. That compared with 390 in 2013; 446 in 2012; 471 in 2011; and 531 in 2010.
“2014 saw the trend toward fixed-income mandates becoming less reliant on the beta of the market continuing and we expect this to persist,” said Paul Cavalier, head of fixed-income research at Mercer, in the release. “Managers are meeting this demand with an increasing array of different types of fixed-income strategies.”
