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Numerology: Fund Flows Bounce Back

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Independent and regional broker/dealers, along with RIAs, will account for the majority of mutual fund net sales by the year 2013, reaching 55% from 48% last year. That’s one of the more interesting findings from Financial Research Corp.’s latest Mutual Fund Market Sizing study released at the end of April 2009. The study found that mutual fund gross sales and redemptions reached their peak in 2007 and 2008, exceeding $2 trillion in each of those years, and while “the velocity of money movement will remain high for the next several years,” FRC suggests that $130 billion to $180 billion will flow annually into mutual funds over the next few years, or the low-to-mid-range of where they have stood over the past decade.

FRC suggests that the wirehouses will see a gradual decline in mutual fund sales, and that the independent broker/dealer channel will see a slowdown in advisor growth. However, the research firms argues that the RIA channel will see the greatest growth in the number of advisors, leading to greater mutual fund sales among RIAs than in any other channel.

In a separate report suggesting a rebound in mutual fund sales, the Investment Company Institute reported on April 29 that there was $9.2 trillion invested in mutual funds as of March 2009 (see table above), up more than $200 billion from the February 2009 figures.