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Diverse Fund Groups Make Strong Showing

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In terms of global flows into market funds, emerging markets and global equity funds captured the lion’s share in 2006, according to Emerging Portfolio Fund Research. The group, which tracks 15,000 international and emerging market funds with $7 trillion in assets, says some $30 billion went into global equity funds last year, which is up 50 percent from 2005, while about $22.5 billion went into emerging market funds.

Overall, the group’s data shows, total inflows into all non-U.S. equity fund groups came to $116.5 billion in 2006, compared to U.S. equity funds’ net outflows of more than $15 billion.

For the year, the global commodities/materials funds “rode the historic highs of many commodities to the largest inflows among the sector funds tracked by EPFR,” the group says: The result was $5.5 billion of net inflows.

When it comes to U.S. fund groups, these global investing trends have played out in their results, naturally. International and global fund flows tracked by the Financial Research Corporation, for instance, show that nearly $163 billion in assets flowed into international and global funds sold through major U.S. and other distributors in the first 11 months of 2006. That’s up from $144 billion in the same period of 2005.

Which of the largest fund groups benefited from this movement? In terms of growing net flows, some large players saw their momentum fall off in 2006, but not all, the FRC data shows. Fidelity, for instance, almost tripled its net flows through November to $13.5 billion. And Dodge & Cox as well as Dimensional Fund Advisors were able to keep up their respective asset inflows.

Thornburg Investment Management is on track to more than double its inflows in 2006 vs. 2005 to more than $5.4 billion. These inflows resulted from several factors, according to Ken Ziesenheim, managing director of TIM. “Basically it was because of excellent performance in all our equity funds, some successes in our efforts in the retirement arena, and we benefited from various model portfolios where we were the recommended fund,” Ziensenheim explains. “On a relative basis, all the products contributed, as our net sales were the highest in our history.”

Moving from negative net flows into positive territory, at least in the first 11 months of 2006, are Bank of America’s Columbia Management Group, JPMorgan Asset Management and AllianceBernstein.

According to Lipper’s latest performance report, two AllianceBernstein fixed-income funds — AllianceBernstein Global Strategic Income and Corporate Bond — have started 2007 as top performers.

In terms of best-selling funds, American Funds had several strong portfolios, such as the American Growth Fund of America, American Capital World Growth & Income, Capital Income Builder and American EuroPac. The fund family had five of the top 10 best-selling funds in the November 2006 FRC tally, based on estimated year-to-date flows. And the American Capital Income Builder was the top-selling fund in the month of November with $1.4 billion in net flows.

Dodge & Cox, Vanguard, Pimco , Fidelity, Franklin, T. Rowe Price and others also had best sellers in 2006.


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