GLOBAL – Investment fund assets worldwide dropped 7.9% in the third quarter of 2002, to 10.65 trillion dollars, according to the latest research by Fefsi, the pan-European umbrella organisation of the investment funds industry of the 15 Member States of the EU.
Data collected from 36 countries showed stock price indices in almost every one moved lower in the third quarter of 2002, with most decreasing 10%, and some between 20% and 40%.
The decline in assets of investment funds was sharper in the US than in Europe, which Fefsi attributed to the greater exposure of US mutual funds to the equity markets.
Equity fund assets fell 17.5% in the third quarter, with 29 reporting countries posting a decline. At the end of the third quarter, assets of equity funds were down 3.972 billion dollars from the second quarter.
Outflows in equity funds were significant in the quarter at 64 billion dollars. In contrast, equity funds in Japan recorded a net-inflow reflecting net sales by exchange-traded funds.
The data shows balanced funds were also hit by the retreat in stock prices. Assets of these funds fell 10.1% in the third quarter to 855 billion dollars.
Assets of bond funds increased 2.6% in the third quarter to 2.395 trillion dollars. Net sales of these funds were 48 billion dollars in the quarter.
Money market funds declined 0.3% in the third quarter, but European money market funds continued to experience strong inflows during the period.
Taking into account changes in investment fund assets, the share of equity funds in all worldwide investment fund asses dropped to 37% at the end of September 2002, down from 42% at the end of the second quarter. The share of bond and money market funds increased as a consequence to 23% and 28% respectively.