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Mutual Fund Assets Worldwide Drop 1.7% in Second Q

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Oct. 29, 2002 — Mutual fund assets worldwide dropped 1.7% between the first and second quarters of 2002, according to data compiled by the Investment Company Institute on behalf of the International Investment Funds Association, an organization of national mutual fund associations.Collecting statistics from 36 countries, ICI reported that fund assets globally stood at $11.56 trillion at the end of second quarter of 2002.

Assets of equity funds were $4.82 trillion at the end of the second quarter, down 8.1% since the end of the first quarter. ICI said the decline reflected falling stock prices throughout the world, but noted that depreciation in the U.S dollar moderated the magnitude of the decrease, measured in U.S. dollars.

Assets of other types funds actually rose over the quarter. Bond funds posted a 6.1% gain in assets, while assets of money-market funds and balanced/mixed funds rose 1.8% and 0.7%, respectively.

Though the overall second-quarter decline in assets was moderated by weakness in the U.S. dollar, ICI said that measured in domestic currencies, assets in 25 of the 36 reporting countries moved lower in the second quarter. However, only eight of the countries posted lower dollar-valued assets, ICI noted, “as the drop in the dollar converted non-dollar-denominated assets in many countries into higher dollar values.”

Mutual funds collectively experienced an outflow of $16 billion in the second quarter of 2002. Only money-market funds, however, saw redemptions exceed sales. Within this group of funds, the $57 billion outflow was concentrated in the U.S. Money-market funds also experienced an outflow in the first quarter of $27 billion.

Despite weakness in stock markets, equity funds posted an inflow of $21 billion in the second quarter, down from $80 billion in the first quarter. Bond and balanced/mixed funds saw small inflows in the second quarter.