Global Trends in 2005
Total mutual fund assets grew strongly in 2005, primarily due to market performance
Assets under management in mutual funds worldwide grew around USD 1.6 trillion – or nearly 10% - during 2005, with rising stock markets in many countries contributing strongly to this growth.Net sales, while more than double those of 2004, contributed just over USD 973 billion to this total.European net sales (representing 25 countries), at around USD 460 billion, outpaced American net sales of USD 385 billion: it is notable that net sales of Luxembourg domiciled funds accounted for over 63% of the European total.
Recent trend in total net assets of funds worldwide - USD billion
Source: Worldwide Mutual Fund Assets and Flows, Q4 2005.Reproduced by permission of the Federation of European Investment Funds and Companies (FEFSI) and the Investment Company Institute
The year saw an increase in the value of funds under management in all asset classes other than money market funds, which remained broadly static: as in 2004, by far the strongest increase in value related to equity-invested funds.Net sales of equity funds were strongest, at around USD 418 billion, followed by net sales of bond funds of USD 223 billion, money market funds of around USD 118 billion and of mixed or balanced funds of USD 109 billion: the smallest sector, ‘other’, which includes funds investing in real estate, saw net sales of USD 101 billion, accounting for all but around 7% of the increase in value of this sector in the year. 2005 saw money market funds recover from their previous net outflow position in 2003 and 2004.
Year on year comparison: funds under management per asset class – USD billion
Source: Worldwide Mutual Fund Assets and Flows, Q4 2005. Reproduced by permission of the Federation of European Investment Funds and Companies (FEFSI) and the Investment Company Institute
The number of funds offered internationally rose to 55,863; an increase of around 3.5% on the previous year. This reflects data from forty one countries. France, Luxembourg, the US and the Republic of Korea all have over 7,000 funds: at the other end of the scale the Philippines, Romania and Slovakia all have less than 50 funds.
The impact of the continuing market recovery - USD billion
Source: Worldwide Mutual Fund Assets and Flows, Q4 2005. Reproduced by permission of the Federation of European Investment Funds and Companies (FEFSI) and the Investment Company Institute
Worldwide net sales in US dollar terms collectively rose by just over 110% - to USD 973 billion – in 2005, with strong sales patterns in many countries. Sales surged from negative to positive territory in the Czech Republic, Germany, Switzerland and Turkey (with Germany showing the strongest recovery, from USD-8,688 in 2004 to USD 10,587 in 2005). Increases of more than 200% in net sales were not uncommon – including Brazil, Canada and Japan – with Mexico leading the way with a rise of nearly 800%.
This trend was not wholly persistent however – Italy experienced continuing net redemptions in 2005 as did Taiwan and New Zealand; while year on year sales in Finland, Hong Kong, Liechtenstein and Spain fell and moved from positive to negative territory in Greece and the Netherlands.
The largest ten collective investment fund markets – end 2005
Source: Worldwide Mutual Fund Assets and Flows, Q4 2005. Reproduced by permission of the Federation of European Investment Funds and Companies (FEFSI) and the Investment Company Institute
America remains the largest domestic fund market in the world, having dominated assets under management since international mutual fund data started to be collected. It is worth noting that the figures for Luxembourg, Ireland and Hong Kong reflect their status as substantial fund domiciles for international sales. If the figures used here were those that represented only domestic fund sales to the domestic market these three entries would not appear in this table.
Asset preferences continue to vary widely across countries – as % of total funds under management in largest markets: end 2005
Source: Worldwide Mutual Fund Assets and Flows, Q4 2005. Reproduced by permission of the Federation of European Investment Funds and Companies (FEFSI) and the Investment Company Institute (NB No Irish data is available so Spanish figures are given)
The UK, Japan, Hong Kong and USA remain the most heavily equity-oriented markets, with bonds predominating in Italy and money market funds being particularly strong in France. ‘Mixed’ refers to funds investing in a mixture of equities and bonds and money market instruments while ‘other’ commonly represents real estate investments.
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