Collective Investments inflows rise 18,5%

The global collective investments industry again showed strong growth last year with net new investments up 18,5 percent to $1,54 trillion.

Fund assets worldwide increased 1,6 percent to $26.20 trillion at the end of the fourth quarter of 2007. For the year as a whole, assets grew 20,1 percent.

Di Turpin (pictured right) chief executive of the Association of Collective Investments says the performance was helped by a fourth quarter which saw higher investment flows particularly to long term funds.

“Net cash flow to all funds worldwide was $383 billion in the fourth quarter, up from $316 billion in the third quarter of 2007. Inflows to long-term funds were a feature with $139 billion in inflows in the fourth quarter compared to $37 billion in the third quarter.“

Money market funds were again a popular destination in the fourth quarter attracting $244 billion in net inflows ($279 billion). This was mainly due to strong inflows to US money market funds with the rest of the world showing outflows. Europe featured with net outflows of $19 billion ($27 billion outflow).

Equity fund flows rebounded to $86 billion in the fourth quarter as against $31 billion in the third quarter. There were net flows to US equity funds of $66 billion ($14 billion) and $57 billion ($48 billion) to the Asia/Pacific region but Europe had a net outflow of $37 billion ($31 billion outflow).

Bond funds again had net outflows - $28 billion as against $50 billion. Europe had net outflows of $46 billion ($63 billion outflow). But there were net inflows of $33 billion in the United States ($21 billion).

At the end of the fourth quarter of 2007, 48 percent of worldwide mutual fund assets were equity funds. Bond funds made up 16 percent, money market funds 19 percent and balanced/mixed fund assets 10 percent. There were 66 350 mutual funds at the end of the fourth quarter of 2007. The statistics from the International Investment Funds Association cover 44 countries.