Mutual fund assets rose to $13.96 trillion worldwide by the end of the fourth quarter of 2003, an increase of about 9 percent for the quarter, according to data compiled by the Investment Company Institute.
Asset growth was boosted by positive stock market returns in almost all reporting countries and the ongoing net flow of new investments. Net cash flow to all funds worldwide was $74 billion in the fourth quarter with equity funds experiencing strong net cash inflows.
The Investment Company Institute compiles worldwide statistics on behalf of the International Investment Funds Association, an organisation of national mutual fund associations. The collection for the fourth quarter of 2003 contains statistics from 39 countries.
Measured in local currencies, fund assets increased in the fourth quarter in most reporting countries. Weakness in the US dollar also contributed to the dollar-measured increase in assets.
Worldwide assets of equity funds increased 15.5 percent during the fourth quarter, posting $5.9 trillion at quarter-end. Stock price indexes rose in almost every country in the fourth quarter and net cash flow into equity funds increased to $116 billion in the quarter, ICI said.
Reflecting net new cash flow into equity funds in the US, the Americas’ flows amounted to $66 billion in the fourth quarter after garnering a similar amount in the third quarter. After posting strong inflows of $28 billion to equity funds in Europe in the third quarter, European equity fund net inflows rose to $44 billion in the fourth quarter. Japan bolstered the Asia/Pacific region’s equity fund flows. Assets of balanced/mixed funds rose 12.7 percent in the fourth quarter of 2003, buoyed by net inflows of $23 billion.
Bond fund assets worldwide increased 3.3 percent in the fourth quarter of 2003 despite small net outflows due to the low rate environment. The cash outflow was $4 billion in the fourth quarter, down from a $6 billion inflow in the third quarter. In the fourth quarter of 2003, bond funds in the Americas experienced small net inflows, while the European and Asian/Pacific regions reported outflows from bond funds.
Money market fund assets worldwide were about unchanged in the fourth quarter. Money market funds experienced a total net outflow of $67 billion in the fourth quarter: an outflow of $50 billion from money market mutual funds in the United States, combined with an outflow of $12 billion in Europe, and a $6 billion outflow in the Asia/Pacific region.
At year-end 2003, assets of equity funds represented 42 percent of all worldwide mutual fund assets. The asset share of money market funds was 23 percent, while that of bond funds was 22 percent. Balanced/mixed funds represented 9 percent of the total.
By region, 57 percent of worldwide assets were in the Americas at year-end, 33 percent were in Europe, and 10 percent in Africa and Asia/Pacific, said ICI.
At year-end, the number of mutual funds worldwide stood at 54,015. By type of fund, 41 percent were equity funds, 22 percent were bond funds, 21 percent were balanced/mixed funds, and 9 percent were money market funds, said ICI.