“When you have a diversified portfolio, you don’t have feast or famine, so we’re trying to smooth out the booms and busts,” Sullivan said in a telephone interview today. “We want to grow our fixed income, but we want to grow our equity, non- U.S. equity and alternative businesses faster to further balance and diversify.”
Money managers, which earn fees based on the assets that they manage for clients, traditionally benefit from rising stock markets and investor deposits into higher-fee equity funds. The U.S. benchmark Standard & Poor’s 500 Index increased 18 percent in the year ended June 30, and 2.4 percent in the second quarter. The MSCI All Country World Index of global stocks rose 14 percent in the 12 months through June and fell 1.2 percent in the second quarter.
Market Slump
Stock and bond markets worldwide slumped in June amid concern that the Federal Reserve may reduce its bond purchases. Investors pulled about $60 billion from U.S. bond funds, the biggest monthly redemptions in records going back to 1961, according to estimates from the Investment Company Institute. Equity funds industrywide gathered a net $260 million.