GLOBAL – Worldwide investment fund assets fell by 3.8% in the first quarter, according to statistics released by Fefsi.
The Fédération Européenne des Fonds et Sociétés d’Investissement’s quarterly survey shows that at the end of the first quarter, investment fund assets had fallen to 10.3 trillion euros, although measured in dollar terms, worldwide assets remained nearly constant reflecting the weakness of the US currency.
Measured in local currencies, fund assets declined over the first quarter in the majority of countries – in the US by two percent and in Europe by one percent.
Worldwide equity fund assets dropped 7.8% in the first quarter as most stock markets came under selling pressure. Balanced funds also suffered, losing around 4.5%. Money market fund assets fell 3.4% because of declines in the US and the Asia-Pacific region.
In Europe, however, money market fund assets rose 8%. Bond fund assets rose in every region except Japan, showing an average rise of 1.8% worldwide.
In terms of net sales of investment funds, Europe performed much better than the US. Europe saw net sales of 40 billion euros in the first quarter, compared to the US which posted net outflows of 20 billion euros. The decline for the US largely reflected a net outflow of 65 billion euros form money market funds, which reversed a 108 billion euro inflow in the previous quarter.
Net sales of bond funds were robust at 81 billion euros. This represented 3.6% of assets of those 27 countries reporting net flow data. Equity funds posted a small outflow of 13 billion euros in the first quarter, with weakness evident in the US and most European countries, says Fefsi.
At the end of March 2003 equity funds represented 35% of all worldwide investment fund assets. Money market funds’ share was 29%, bond funds’ was 24% and balanced funds’ was eight percent.
The number of mutual funds worldwide stood at 53,150 at the end of the first quarter. Of these, 42% were equity funds, 22% were bond funds, 21% were balanced/mixed funds and nine percent were money market funds.
Commenting on the figures, Bernard Delbecque, senior economic adviser at Fefsi, said: “Since the first quarter, stock market conditions have improved, but we are still in a transitory situation with investors still cautious about a market recovery.
“If stock markets maintain the gains of the last few months, then perhaps in the second half we could see a stronger and more positive growth in the investment fund industry. For the moment, however, we are still in a ‘wait and see’ situation.”