The Markets February 2, 2007

Q3 Mutual Fund Growth Better Than Early 2006

The combined assets of mutual funds around the globe climbed 4.1% in the third quarter of 2006 to $20.22 trillion, beating the 2005 numbers for the same quarter by $2.94 trillion, according to the Investment Company Institute’s (ICI) survey of the mutual fund industry.
Reported by

The total assets were also greater than those posted in Q2 ($19.4 trillion) and Q3 ($19.1 trillion).

Assets in equity funds rose 4.1%, with $9.6 trillion in assets at the end of Q3. Bond funds were up 2.1% to $3.7 trillion and money market funds went up by 3.6%, while assets in balanced/mixed funds increased 6.7% to $1.9 trillion.

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Net cash flows to mutual funds worldwide were $252 billion in the third quarter, with equity fund flows slowing to $64 billion, compared with $74 billion in the second quarter.

Asia/Pacific and African regions accounted for the greatest equity inflows for the quarter, at $20 billion, followed by the Americas ($18 billion), down from $42 billion and $29 billion, respectively, in the second quarter. Inflows into European equity funds strengthened, increasing from $3 billion in Q2 to $26 billion in Q3.

Balanced fund inflows remained strong at $37 billion, but slipped from the $48 billion reported in the quarter before. Net flows to bond funds remained weak at $8 billion in the third quarter of 2006, managing to barely recover from an outflow of $5 billion in the second quarter.

Net inflows to bond funds in the Americas were $20 billion in the third quarter, but were offset by outflows in the European region and the Asian and Pacific region, according to the release.

The pace of flows into money market funds picked up in Q3 to $124 billion, up from $71 billion in Q2, with the U.S. accounting for $101 billion of money market inflows in the third quarter, up from $58 billion in the second quarter.

The complete ICI data is here.

Products February 1, 2007

ProShares to Use Dow Jones Indexes for its ETFs

Dow Jones Indexes announced that 11 of its U.S. indexes have been licensed to ProShares Trust and its affiliates to serve as the basis of 22 leveraged and inverse exchange-traded funds (ETFs) that launched on the American Stock Exchange February 1.
Reported by

According to a press release from Dow Jones, the ETFs are based on nine Dow Jones U.S. Industry Indexes and two Dow Jones U.S. Subsector Indexes, which are listed as follows:

  • Dow Jones U.S. Basic Materials Index
  • Dow Jones U.S. Consumer Goods Index
  • Dow Jones U.S. Consumer Services Index
  • Dow Jones U.S. Financials Index
  • Dow Jones U.S. Health Care Index
  • Dow Jones U.S. Industrials Index,
  • Dow Jones U.S. Oil & Gas Index
  • Dow Jones U.S. Technology Index
  • Dow Jones U.S. Utilities Index
  • Dow Jones U.S. Real Estate Subsector Index
  • Dow Jones U.S. Semiconductors Subsector Index.

“ProShares’ latest lineup of ETFs based on various Dow Jones industry and subsector indexes offers market participants a different, elevated approach to sector-style investing,’ said Michael Petronella, president of Dow Jones Indexes and Reprints, in the release. “The indexes licensed to ProShares encompass a diverse array—from the broader industry groups to the more narrowly defined subsectors.’

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