Closed-ended Funds Gain $16.69 Billion In Assets In 2002

March 27, 2003 ( - Strong equity contributions led the way as closed-end fund assets increased $5.38 billion in the fourth quarter of 2002.

The combined assets of the nation’s closed-end funds were $156.39 billion at year-end 2002, up significantly from the $139.70 billion total tallied at the end of 2001. Contributing to the rise in 2002’s final quarter were equity fund assets increasing by $3.08 billion to $33.54 billion, and bond fund assets growing by $2.30 billion to $122.85 billion, according to the Investment Company Institute’s (ICI) quarterly statistical release.

On the other end of the spectrum, the value of new proceeds invested in closed-end funds – those investment companies with a fixed amount of shares not normally redeemed or purchased directly by the fund, generally listed on a stock exchange or traded in the over-the-counter market generally issue a fixed amount of shares – showed a slight decrease. For the quarter, proceeds to closed-end funds were $5.12 billion, compared with $5.84 billion in the third quarter.

Asset Breakdown

Total equity assets showed gains despite a decrease in global equity, which gave back $71 million in the fourth quarter, to end 2002 at $7.09 billion.    The increase was due to domestic equity’s $3.15 billion asset gain in the fourth quarter, ending 2002 with $26.45 billion in total assets.   Year-over-year, domestic equity funds, gained $4.54 billion in assets, while global equities gave back $1.71 billion.  

Similar results were seen in total bond fund assets, where increases in domestic municipals and global bonds helped to prop up the category after domestic taxables gave back $500 million to end the fourth quarter, and 2002, at $25.23 billion in total assets.   Domestic municipals on the other hand garnered $2.40 billion in additional fund assets in the fourth quarter to total $25.28 billion and global bonds added $402 million in the fourth quarter to close the year at a $9.41 billion total.

Compared to 2001, domestic taxables were a slight $43 million higher, while domestic municipals and global bonds showed much higher asset gains:    $12.91 billion and $912 million, respectively.  

Roll Call

There were 562 closed-end funds at year-end 2002. Bond funds totaled 437, and equity funds totaled 125. There were 526 closed-end funds at the end of the third quarter, and 528 closed-end funds at year-end 2001.