ICI: Worldwide Mutual Funds Assets Up 10.3%

October 9, 2003 (PLANSPONSOR.com) - Total mutual fund assets spiked 10.3% higher worldwide during the second quarter of 2003.

Rising equity prices and continued strong demand for bond funds boosted total assets of mutual funds worldwide.   With the net flow of $109 billion in new investments, total assets now stand at $12.36 trillion, according to data from the Investment Company Institute (ICI).

Assets of equity funds went up 18.4% during the period to $4.7 trillion. This increase was attributed by ICI to rising stock price indices in almost every country, with most indexes showing double-digit gains. Further, net cash flow to equity funds reversed an outflow recorded in the first quarter to gain $69 billion in the second quarter (See  Worldwide Fund Assets Steady Through First Quarter ). The turnaround in net flow occurred primarily among funds in Europe and the United States, with equity funds in the Asia/Pacific region again recording an inflow in the second quarter, although the inflow was down slightly from that in the first quarter.

Bond funds also went up during the second quarter, recording an 8.3% gain to an aggregate asset level of $2.9 billion.   The net flow to bond funds in the second quarter of 2003 was strong at $79 billion and compared favorably with the $87 billion inflow in the first quarter. US and European bond funds again received sizable new investments in the second quarter, while bond funds in the Asia/Pacific region posted a small outflow.

Additionally, balanced/mixed funds recorded an inflow in the second quarter as asset of this groups rose 12.3% to $1 trillion.  Money market fund assets posted an increase of 0.6%, with an outflow moderated somewhat in the second quarter to $47 billion from $56 billion in the first quarter.

Once the dust had settled, 38% of all mutual funds held globally were equity funds.   This was followed by similar allocations to money market (26%) and bond (23%) funds, while balanced /mixed (8%) and other (4%) rounded out the list.   By region, more than half (59%) of worldwide mutual fund assets were in the Americas at the end of the second quarter, compared with 32% in Europe and 9% in Africa and Asia/Pacific.

A complete copy of the ICI release can be found at  http://www.ici.org/stats/mf/ww_06_03.html .