GLOBAL – Investment fund assets worldwide rose 5.8% at the end of third quarter 2005 to €14.4trn, according to the European Funds and Asset Management Association (EFAMA).
The latest international statistical report – covering 41 countries and compiled by EFAMA and the Investment Company Institute - reveals that net cash flow to all funds worldwide was a “robust” €250bn versus €132bn in the second quarter.
While assets in each investment category grew in the last quarter, the largest increase was the 8.2% boost in worldwide equities to €6.4tn.
“The strong stock market performance combined with the ongoing net cash flow boosted equity fund assets in almost all countries in the third quarter,” said an EFAMA statement.
According to EFAMA research and economics director Bernard Delbecque, “There was a strengthening of confidence of investors in the equity market” in the third quarter versus the “subdued” second quarter.
Bond fund assets grew 4% to just under €2.9tn, assets in balanced/mixed funds increased by 6% to around €1.3tn, and there was a 3% climb in money market fund assets to €2.6tn.
Delbecque told IPE: “Bonds also did well. Investment in bonds has been gaining interest for a few years, and for the last four to five quarters, good inflows have been observed in many countries.”
While worldwide equity fund flows grew €20bn from the second quarter to €72bn, net inflows in Europe of €39bn were “particularly strong”, said the EFAMA report.
According to Delbecque, these large inflows in Europe are “interesting and very unusual”. One reason could be growing European investor confidence in the market and expectations of strong returns, which was validated by the subsequent good performance.
The US reported net inflows to equity funds of €24bn, and the Asia/Pacific region accounted for €9.5bn, said the report.
Furthermore, UCITS assets rose by 7% in Europe, while the American mutual fund market recorded an asset increase of 4.7% when measured in local currency.
Delbecque stated that 2005 was a “very good year for European asset and fund managers” in terms of assets under management and inflows into investment funds. However, the final analysis for the end of 2005 will be released in roughly three weeks time.