The Markets

Assets in Mutual Funds Worldwide Plunge in Q308

Mutual fund assets worldwide decreased 12.1% to $21.66 trillion at the end of the third quarter of 2008, according to the Investment Company Institute (ICI).
Reported by Rebecca Moore

Net cash flow to all funds was negative in the third quarter with $218 billion in outflows—the first worldwide outflow recorded since the third quarter of 2002, ICI said.

Net outflows from equity funds worldwide were $151 billion in the third quarter, compared with a net inflow of $29 billion in the second quarter of 2008. The Americas registered net flows of $95 billion out of equity funds in the third quarter, while European equity funds posted $64 billion in outflows. Flows to equity funds in the Asia/Pacific region slowed but remained positive, dropping to a $9 billion inflow in the third quarter compared with $16 billion in the second quarter, according to ICI data.

Bond funds experienced $66 billion in net outflows in the third quarter of 2008, compared with net inflows of $14 billion in the second quarter of 2008. The Americas experienced net inflows of $15 billion to bond funds in the third quarter, down from $39 billion in the second quarter. In contrast, Europe continued to experience net outflows from bond funds, with $61 billion in net outflows in the third quarter, compared with net outflows of $39 billion in the second quarter. Bond fund flows turned negative in the Asia/Pacific region, with outflows of $21 billion in the third quarter compared to inflows of $15 billion in the second quarter.

Worldwide outflows from balanced/mixed funds were $24 billion in the third quarter of 2008, compared with approximately zero net flows in the first half of the year. Net outflows from balanced/mixed funds in the Americas were $11 billion in the third quarter, about offsetting the $11 billion inflow registered in the second quarter. European balanced/mixed funds experienced net outflows of $10 billion in the third quarter compared with net inflows of $3 billion in the second quarter.

Net flows into worldwide money market funds were $28 billion in the third quarter of 2008, compared with outflows of $70 billion in the second quarter of 2008. Both the Americas and Europe experienced inflows into money market funds, with a combined net flow of $44 billion in the third quarter compared to a combined outflow of $83 billion in the second quarter. Asia/Pacific money market funds registered net outflows of $18 billion in the third quarter after reporting net inflows of $12 billion in the second quarter.

At the end of the third quarter of 2008, 40% of worldwide mutual fund assets were held in equity funds, 18% in bond funds, and 10% in balanced/mixed funds. Money market fund assets represented 25% of the worldwide total, ICI said.

By region, 55% of worldwide assets were in the Americas in the third quarter of 2008, 34% were in Europe, and 11% in Africa and Asia/Pacific.

The number of mutual funds worldwide stood at 69,477 at the end of the third quarter of 2008 – 40% equity funds, 21% balanced/mixed funds, 18% bond funds, and 5% money market funds.

The ICI data is here.