World Mutual Fund Assets Bump Up 7.6% in Q406

Long-term funds – stock, bond, and hybrid funds – had a net inflow of $261 billion in the fourth quarter, about twice as high as the pace of net flows in the second and third quarters, but fell short of Q1 inflows of $409 billion, the ICI data showed.

Assets of equity funds climbed 10% to $10.5 trillion at the end of the last quarter while bond funds were up 4.3% and money market funds, up 4.9% in the same quarter. The assets of balanced/mixed funds rose by 7.9% to $2.1 trillion for the quarter, and for the year, assets in these funds grew 32.5% compared to 26.2% for equity funds and less than 15% for both bond and money market funds.

Net cash flow to mutual funds worldwide was $404 billion in the fourth quarter of 2006, with both long-term funds and money market funds experiencing aggregate net inflows. Equity fund flows worldwide were $150 billion in the fourth quarter, compared with $65 billion in the third quarter, according to ICI.

The Americas accounted for the lion’s share of equity flows, with $79 billion in the fourth quarter, followed by the Asia/Pacific region for $36 billion, and Europe for $35 billion of equity flows, up from $18 billion, $20 billion, and $26 billion, respectively, in the third quarter.

Net flows to bond funds strengthened to $40 billion in the fourth quarter of 2006 after posting a net inflow of $3 billion over the past two quarters combined, with the U.S. accounting for nearly the entire upswing.  

Balanced fund inflows came in at $45 billion, while flows into money market funds were $143 billion the fourth quarter, up from $124 billion in the quarter before, with the U.S. accounting for $145 billion of money market inflows.

For the full fourth quarter ICI report visit  http://www.ici.org/stats/mf/ww_12_06.html .