The Markets February 22, 2010

Global Mutual Funds Make Turnaround in 2009

Equity/mixed, bond, and other long-term mutual funds around the world captured $900 billion in net flows during 2009, according to Strategic Insight (SI), an Asset International company.
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That represents a remarkable turnaround from 2008’s $700 billion in net redemptions, SI noted.

The U.S. led the way with inflows of $503 billion for the year, followed by international cross-border funds in Luxembourg/Dublin, as well as offshore funds domiciled in Cayman Islands, British Virgin Islands, Bermuda, etc., with $211 billion in net inflows. Funds in Europe posted a $102 billion inflow, while Asia saw a $55 billion infusion into long-term funds.

While bond funds were the hot ticket in the U.S. ($424 billion), the international cross-border and offshore market saw most of its inflows in equity funds ($108 billion).

According to SI’s data, money market funds experienced net redemptions globally in 2009. The U.S. posted a $524 billion net outflow from money market funds, while Europe posted a $93 billion net outflow. Asia saw a $3 billion boost to money market funds for the year.

SI said that starting in January, its Global Mutual Fund FlowWatch will include the markets of Belgium, the Netherlands, Austria, Portugal, Czech Republic, China, Singapore, Thailand, Malaysia, Indonesia, and the Philippines.

Information about the report is available at www.sionline.com.

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