The Investment Company Institute released its latest "Worldwide Mutual Fund Assets and Flows for the Fourth Quarter 2011 last week, and the data showed both inflows into money market funds ($97 billion) and an overall decrease in assets (-$51.0 billion). While U.S. money funds showed a $62.2 billion rebound in Q4, European money funds dropped a precipitous $154.7 billion, primarily due to Europe's recent fund reclassifications and defining of the term "money market fund". (See this BNP release and our Aug. 29, 2011, News "European Securities and Markets Authority Issues Q and A on MMF Defs" for more details.) Ireland and France in particular showed dramatic asset declines, losing $109.8 billion and $40.6 billion, respectively, from their money fund rolls.
ICI's quarterly says, "Mutual fund assets worldwide increased 2.4 percent to $23.78 trillion at the end of the fourth quarter of 2011. Worldwide net cash flow to all funds was $85 billion in the fourth quarter, compared to $171 billion of net outflows in the third quarter of 2011. Flows out of long-term funds slowed to $12 billion in the fourth quarter from an outflow of $108 billion in the previous quarter. Equity funds worldwide had net outflows of $70 billion in the fourth quarter compared to $108 billion of net outflows in the third quarter. Flows into bond funds totaled $66 billion in the fourth quarter, rising from $10 billion of net inflows in the previous quarter. Flows into money market funds were $97 billion in the fourth quarter of 2011, reversing the $63 billion of net outflows in the third quarter of 2011. The Investment Company Institute compiles worldwide statistics on behalf of the International Investment Funds Association, an organization of national mutual fund associations. The collection for the fourth quarter of 2011 contains statistics from 46 countries."
The report explains, "The growth rate of total mutual fund assets reported in U.S. dollars was made smaller by U.S. dollar appreciation. For example, on a U.S. dollar–denominated basis, mutual fund assets in Europe decreased by 1.3 percent in the fourth quarter, compared with an increase of 3.0 percent on a Euro-denominated basis. On a U.S. dollar–denominated basis, equity fund assets increased 4.5 percent to $9.5 trillion at the end of the fourth quarter of 2011. Balanced/mixed fund assets rose 1.3 percent in the fourth quarter, and money market fund assets fell 1.6 percent due to a reclassification of some money market funds in Europe. Bond fund assets increased 3.1 percent in the fourth quarter to $5.8 trillion."
ICI continues, "Money market funds worldwide experienced $97 billion of net inflows in the fourth quarter of 2011, the first global inflow since the first quarter of 2009, and contrasts with the $63 billion of net outflows seen in the third quarter of 2011. These inflows reflect increased risk aversion amongst mutual fund investors in the fourth quarter, and positive inflows were recorded in the Americas, Europe, and Asia and Pacific regions. Money market funds in the Americas and in Europe posted net inflows of $61 billion and $15 billion, respectively, in the fourth quarter after witnessing net outflows of $54 billion and $6 billion, respectively, in the previous quarter. Money market funds in the Asia and Pacific region posted a net inflow of $23 billion in the fourth quarter, compared with $1 billion of net outflows in the third quarter.... Money market fund assets represented 20 percent of the worldwide total."
The United States continues to dominate worldwide money fund assets with $2.691 trillion, or 57.3% of the global total (up $62.2B in Q4). France remains in second place, though its totals declined by $40.6 billion to $449.7 billion (9.6% of the global total). Luxembourg ranks third with $387.5 billion (8.3%), and Ireland ranks fourth with $364.8 billion (7.8%). Fifth-ranked Australia showed gains (up $15.9B to $283.8 billion, or 6.0% of the total), as did sixth ranked Mexico ($57.8B, or 1.2%). Seventh-ranked China showed a jump of $27.0 billion to $46.8 billion, or 1.0%. Korea, Rep. of ($46.8B, 1.0%), Brazil ($40.3B, 0.9%) and Italy ($34.3, 0.7%) rounded out the top 10 largest money fund markets.
Note that Crane Data is assisting German conference company IQPC in producing European Money Fund Summit, which will be held in Frankfurt November 19-21, 2012 (see www.moneyfundsummit.com). We've been tracking Dublin and Luxembourg-based money market funds for several years now (including the new collection of portfolio holdings on these funds), and we intend to expand our coverage of the European and global market in 2012. (For more information on the European Money Fund Summit e-mail or call Pete. To request a copy of our XLS spreadsheet ranking global money fund markets based on ICI's Worldwide Asset totals or for a copy of our Money Fund Intelligence International, e-mail Natalia.)
