PLANADVISER - November/December 2017 - 12

investment focus
Zero/Zero Share Classes Hit $1.2t
74 investment managers now offer these funds
R
egardless of what comes to bear
with the Department of Labor
(DOL) fiduciary rule-full implementation
and enforcement, total
repeal or, as is the case now, something
in between-its influence is already
clearly seen across the industry. With
the ongoing focus on fee transparency,
only encouraged by this legislation,
interest has grown significantly
over recent years in mutual fund share
classes that facilitate the external
payment of fees for services.
Such " zero/zero " share classes-
those lacking embedded revenuesharing,
service or distribution
expenses-have grown in both availability
and assets as the benefits associated
with them have been popularized.
Assets in this type of share class
have climbed to $1.2 trillion as of the
end of the third quarter, spread across
74 managers. Net flows of $115 billion
into zero/zero classes in three quarters
of 2017 have already eclipsed the fullyear
2016 figures. Overall, these classes
have exhibited a five-year compound
annual growth rate (CAGR) of 35%.
While these share classes originated
in the retirement market and
have historically been offered solely
to employer-sponsored plans-the
most popular naming convention is
R6-many managers have taken note
of the funds' appeal and have broadened
eligibility to include other institutional
investors such as endowments
and foundations. Taking this a step
further, American Century, American
Funds and Lord Abbett recently
launched separate zero/zero share
classes specifically available to retail
wealth management clients through
fee-based platforms.
The launch of these products in
the retail marketplace extends their
advantages and consistency to individual
investors and their advisers as
the industry tries to address concerns
related to fee transparency and fiduciary
duty. -Matt Cirillo
Total Zero/Zero Assets
Total assets ($mm)
$1,179,495
$722,593
$514,918
$417,975
$279,253
2012
2013
Zero/Zero Net Flows
Net new flows ($mm)
$115,039
$72,241
$38,931
2012
$48,016
$55,096
$59,787
2014
2015
2016
YTD 2017
$598,342
2013
2014
Zero/Zero Managers
Number of managers
74
66
53
43
29
56
2015
2016
YTD 2017
2012
2013
Source: Strategic Insight Simfund
2014
2015
2016
YTD 2017
All data as of September 30, 2017
12 | planadviser.com november-december 2017

http://www.planadviser.com

PLANADVISER - November/December 2017

Table of Contents for the Digital Edition of PLANADVISER - November/December 2017

The Next Step
2017 PLANADVISER National Conference
2017 Practice Benchmarking Survey
Aggressive Plan Design
Professional Groups
The Value of Fixed Income
PLANADVISER - November/December 2017 - C1
PLANADVISER - November/December 2017 - FC1
PLANADVISER - November/December 2017 - FC2
PLANADVISER - November/December 2017 - C2
PLANADVISER - November/December 2017 - 1
PLANADVISER - November/December 2017 - 2
PLANADVISER - November/December 2017 - 3
PLANADVISER - November/December 2017 - 4
PLANADVISER - November/December 2017 - 5
PLANADVISER - November/December 2017 - 6
PLANADVISER - November/December 2017 - 7
PLANADVISER - November/December 2017 - 8
PLANADVISER - November/December 2017 - 9
PLANADVISER - November/December 2017 - 10
PLANADVISER - November/December 2017 - 11
PLANADVISER - November/December 2017 - 12
PLANADVISER - November/December 2017 - 13
PLANADVISER - November/December 2017 - 14
PLANADVISER - November/December 2017 - 15
PLANADVISER - November/December 2017 - 16
PLANADVISER - November/December 2017 - 17
PLANADVISER - November/December 2017 - 18
PLANADVISER - November/December 2017 - 19
PLANADVISER - November/December 2017 - 20
PLANADVISER - November/December 2017 - 21
PLANADVISER - November/December 2017 - 22
PLANADVISER - November/December 2017 - 23
PLANADVISER - November/December 2017 - 24
PLANADVISER - November/December 2017 - 25
PLANADVISER - November/December 2017 - 26
PLANADVISER - November/December 2017 - 27
PLANADVISER - November/December 2017 - 28
PLANADVISER - November/December 2017 - 29
PLANADVISER - November/December 2017 - The Next Step
PLANADVISER - November/December 2017 - 31
PLANADVISER - November/December 2017 - 32
PLANADVISER - November/December 2017 - 33
PLANADVISER - November/December 2017 - 2017 PLANADVISER National Conference
PLANADVISER - November/December 2017 - 35
PLANADVISER - November/December 2017 - 36
PLANADVISER - November/December 2017 - 37
PLANADVISER - November/December 2017 - 38
PLANADVISER - November/December 2017 - 39
PLANADVISER - November/December 2017 - 40
PLANADVISER - November/December 2017 - 41
PLANADVISER - November/December 2017 - 42
PLANADVISER - November/December 2017 - 43
PLANADVISER - November/December 2017 - 44
PLANADVISER - November/December 2017 - 45
PLANADVISER - November/December 2017 - 2017 Practice Benchmarking Survey
PLANADVISER - November/December 2017 - 47
PLANADVISER - November/December 2017 - 48
PLANADVISER - November/December 2017 - 49
PLANADVISER - November/December 2017 - 50
PLANADVISER - November/December 2017 - 51
PLANADVISER - November/December 2017 - 52
PLANADVISER - November/December 2017 - 53
PLANADVISER - November/December 2017 - Aggressive Plan Design
PLANADVISER - November/December 2017 - 55
PLANADVISER - November/December 2017 - 56
PLANADVISER - November/December 2017 - Professional Groups
PLANADVISER - November/December 2017 - 58
PLANADVISER - November/December 2017 - 59
PLANADVISER - November/December 2017 - The Value of Fixed Income
PLANADVISER - November/December 2017 - 61
PLANADVISER - November/December 2017 - 62
PLANADVISER - November/December 2017 - 63
PLANADVISER - November/December 2017 - 64
PLANADVISER - November/December 2017 - C3
PLANADVISER - November/December 2017 - C4
https://www.planadviserdigital.com/planadviser/winter_2023
https://www.planadviserdigital.com/planadviser/fall_2023
https://www.planadviserdigital.com/planadviser/summer_2023
https://www.planadviserdigital.com/planadviser/industryleader_2023
https://www.planadviserdigital.com/planadviser/spring_2023
https://www.planadviserdigital.com/planadviser/november_december_2022
https://www.planadviserdigital.com/planadviser/september_october_2022
https://www.planadviserdigital.com/planadviser/july_august_2022
https://www.planadviserdigital.com/planadviser/may_june_2022
https://www.planadviserdigital.com/planadviser/industry_leader_awards_2022
https://www.planadviserdigital.com/planadviser/march_april_2022
https://www.planadviserdigital.com/planadviser/january_february_2022
https://www.planadviserdigital.com/planadviser/november_december_2021
https://www.planadviserdigital.com/planadviser/september_october_2021
https://www.planadviserdigital.com/planadviser/july_august_2021
https://www.planadviserdigital.com/planadviser/may_june_2021
https://www.planadviserdigital.com/planadviser/march_april_2021
https://www.planadviserdigital.com/planadviser/january_february_2021
https://www.planadviserdigital.com/planadviser/november_december_2020
https://www.planadviserdigital.com/planadviser/september_october_2020
https://www.planadviserdigital.com/planadviser/july_august_2020
https://www.planadviserdigital.com/planadviser/may_june_2020
https://www.planadviserdigital.com/planadviser/march_april_2020
https://www.planadviserdigital.com/planadviser/january_february_2020
https://www.planadviserdigital.com/planadviser/november_december_2019
https://www.planadviserdigital.com/planadviser/september_october_2019
https://www.planadviserdigital.com/planadviser/july_august_2019
https://www.planadviserdigital.com/planadviser/may_june_2019
https://www.planadviserdigital.com/planadviser/march_april_2019
https://www.planadviserdigital.com/planadviser/january_february_2019
https://www.planadviserdigital.com/planadviser/november_december_2018
https://www.planadviserdigital.com/planadviser/september_october_2018
https://www.planadviserdigital.com/planadviser/july_august_2018
https://www.planadviserdigital.com/planadviser/may_june_2018
https://www.planadviserdigital.com/planadviser/march_april_2018
https://www.planadviserdigital.com/planadviser/january_february_2018
https://www.planadviserdigital.com/planadviser/november_december_2017
https://www.planadviserdigital.com/planadviser/september_october_2017
https://www.planadviserdigital.com/planadviser/july_august_2017
https://www.nxtbookmedia.com