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January 19, 2005 at 07:00 PM
Mutual Fund Assets Surge To Almost $8 Trillion
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Americans continued to put their investment dollars into mutual funds last year, increasing the combined assets of long-term funds by 6% to $7.9 trillion as of November, from $7.4 trillion in December 2003, according to the Investment Company Institute, Washington.
Individuals and households, rather than institutions, accounted for most of the new investments, ICI says.
Almost half of U.S. households, or 92 million Americans, own at least one mutual fund, ICI reports. For the most part, they put their money into long-term mutual funds (stock, bond and hybrid funds), which have around 76% of all fund assets, ICI notes.
More than half of mutual fund assets are in stock funds. Bond and hybrid funds accounted for roughly one-fourth of assets and money market funds the remaining one-fourth.
Net inflow of cash into long-term funds reached almost $197 billion through November 2004, down 2% from the net intake of $201 billion reported in the same period in 2003.
ICI analysts expect when final figures for 2004 are in, that net new investor dollars in long-term funds for the full year will meet or exceed the net inflow for each of the previous 5 years.
(Net inflow reflects new sales plus the value of exchanges from one fund to another, minus redemptions and cash retained following exchanges of funds.)
For all of 2003, $216 billion was invested in long-term funds, nearly an 80% increase over 2002, with $121 billion.
Most of the demand for mutual funds in recent years has come from renewed investor interest in stock and hybrid funds, which offset a drop in net flows to bond funds, ICI says.
Net sales of stock funds reached more than $167 billion through November 2004, up almost 18% from $138 billion for the same period a year earlier (see table).
