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Net Investments Worldwide Total US$130 Billion In October

by Carla Johnson, Investors

04 December 2001

In a report on global fund flows, fund tracker Strategic Insight has estimated that mutual funds worldwide for 2001 up to October totalled US$750 billion in net flows and in October alone the industry collected $130 billion in net new investments.

According to Strategic's Global Mutual Fund Flow Watch (October 2001), most of the mutual fund expansion in that month occurred in the United States, where investors contributed $90 billion in net flows to mutual funds and variable annuities. From the US funds industry, domestic equity and balanced funds achieved nearly $7 billion in net flows, while international and global equity funds lost $4.3 billion to outflows.

For mutual funds outside of the US, investors in Japan added about $15 billion in net new money to mutual funds last month and of that total, states the report, almost $9 billion went to money market funds and $5 billion to bond funds, with equity funds getting the relatively small remainder. Canadian net fund inflows came to $2.1 billion. UK funds gained $1.1 billion.

Data on fund investment is unavailable in Europe, but the report estimates that there was at least $20 billion in fund net flows during October in all of Europe. German retail mutual funds experienced $4.5 billion in net flows. Italian funds totalled $3.8 billion of inflows including Luxembourg and foreign domiciled funds sold in Italy, and mutual funds in Spain amounted to $1.1 billion of inflows.

Luxembourg domiciled funds accounted for a good 70 per cent of investment fund net flows in Europe during the first half of 2001. Strategic estimated moderate inflows during October.

'Altogether, in the single month following one of the worst disasters ever to impact the United States,' stated the report, 'investors committed nearly $90 billion in net investments to mutual funds. New sales of equity, balanced, and bond funds expanded by 73 per cent to total $112 billion.'

The report added: 'Assuming that equity markets remain near their current levels for the remainder of the year, we estimate equity fund flows in all of 2001 might exceed $60 billion, a remarkable amount considering economic, employment, and personal anxiety. Moreover, this year could end with over $100 billion in bond fund inflows, near records reached in 1992 and 1993, and money fund flows probably exceeding $400 billion.'

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