Investment Funds Worldwide Top $17 Trillion

by Carla Johnson, Investors Offshore.com

15 February 2006

A report last week from the Investment Company Institute on Q3 2005 shows that mutual fund assets worldwide increased to $17.28 trillion at the end of the quarter, up 18% on the previous year.

Net cash flow to all funds worldwide was $305 billion in the third quarter of 2005, compared with $166 billion in the second quarter. Third-quarter inflows to long-term funds were up by 52% compared with their second-quarter pace. Money market fund flows swung strongly into positive territory with a $59 billion inflow worldwide, mainly resulting from inflows in the United States.

The Investment Company Institute (ICI) compiles worldwide statistics on behalf of the International Investment Funds Association, an organization of national mutual fund associations. The collection for the third quarter of 2005 contains statistics from 41 countries.

ICI reports that stock markets in nearly every reporting country experienced positive performance in the third quarter. The strong stock market performance combined with the ongoing net cash flow boosted mutual fund assets in most countries in the third quarter of 2005. Growth in assets reported in US dollars was slightly muted due to the appreciation of the dollar. Indeed, mutual fund assets in Europe on a Euro-denominated basis rose 6.9%, compared with 6.5% on a US-dollar-denominated basis.

Equity fund assets represented the bulk of all worldwide mutual fund assets: at the end of the third quarter of 2005, 44% of worldwide mutual fund assets were equity funds. The asset share of money market funds was 18%, while that of bond funds was 20%. Balanced/mixed fund assets represented 9% of the total.

The number of mutual funds worldwide stood at 56,095 at the end of the third quarter of 2005. By type of fund, 41% were equity funds, 24% were bond funds, 20% were balanced/mixed funds, and 6% were money market funds.

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