Strange but true: In the midst of a stock rally, the two new mutual funds with the largest inflows so far this year are total return funds. The Wells Fargo Advantage Absolute Return
fund has taken in $1.3 billion this year, and the Russell Multi-Strategy Alternative
fund has seen $699 million in flows.
This fact prompted Reuters
reporter David Randall to investigate
the popularity of total return. He thinks "painful memories of the financial crisis and lingering skepticism about Wall Street" have pushed investors into the apparent safety of total return.
Even though these funds are usually more expensive than vanilla stock funds -- average total return fees are 1.35 percent, compared to 80 basis points for stock funds, according to Reuters
-- and they generally haven't posted the returns that the S&P has this year, they're getting love from advisors. The story highlights Atlanta-based advisory firm Brightworth
, which has steered $20 million in client assets into the Wells Fargo Advantage fund.
The full Reuters
story is here
Stay ahead of the news ... Sign up for our email alerts now