On Wednesday, the Investment Company Institute released its latest data on "Worldwide Mutual Fund Assets and Flows (Fourth Quarter 2013," which shows that global money market mutual fund assets grew strongly in Q4'13. This follows a sharp rebound in Q3'13, when "cash" funds grew by $197.9B. (ICI began publishing their Worldwide statistics in 2004.) The latest data show worldwide money market mutual fund assets rising by $67.4 billion, led by large increases in Chinese and U.S. MMFs, in Q4'13. But MMF assets declined by $33.4 billion over the past year (through 12/30/13) to $4.760 trillion. Crane Data excerpts from ICI's latest release and analyzes the money fund portion of the ICI's latest global statistics, below.

ICI's latest Worldwide Funds release says, "Mutual fund assets worldwide increased 4.0 percent to $30.05 trillion, an all-time high, at the end of the fourth quarter of 2013, and rose $3.2 trillion over the year due primarily to strong capital appreciation in equity and balanced/mixed fund categories. Worldwide net cash flow to all funds was $252 billion in the fourth quarter, compared to $191 billion of net inflows in the third quarter of 2013. Flows into long-term funds increased to $203 billion in the fourth quarter from an inflow of $90 billion in the previous quarter, and long-term mutual funds received a record inflow of $955 billion in 2013. Equity funds worldwide had net inflows of $145 billion in the fourth quarter, up from $77 billion of net inflows in the third quarter. Outflows from bond funds totaled $15 billion in the fourth quarter, down from net outflows of $55 billion in the third quarter. Inflows into money market funds were $49 billion in the fourth quarter of 2013, somewhat lower than the $101 billion inflow recorded in the third quarter of 2013."

The quarterly statement explains, "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 2013 contains statistics from 45 countries."

ICI continues, "The growth rate of total mutual fund assets reported in U.S. dollars was made larger by U.S. dollar depreciation. For example, on a U.S. dollar–denominated basis, mutual fund assets in Europe increased by 4.8 percent in the fourth quarter, compared with an increase of 2.6 percent on a Euro-denominated basis. On a U.S. dollar–denominated basis, equity fund assets increased 7.2 percent to $13.3 trillion at the end of the fourth quarter of 2013, and accounted for over three-quarters of the $1.2 trillion quarterly increase in global mutual fund assets. Bond fund assets were steady at $7.1 trillion in the fourth quarter. Balanced/mixed fund assets rose 5.2 percent in the fourth quarter, accounting for 15 percent of the global increase in assets, while money market fund assets rose 1.5 percent."

The release adds, "Money market funds worldwide experienced a net inflow of $49 billion in the fourth quarter of 2013 after registering a net inflow of $101 billion in the third quarter of 2013. The global inflow from money market funds in the fourth quarter was driven by inflows of $37 billion in the Americas and $41 billion in the Asia and Pacific region. Money market funds in Europe posted outflows of $28 billion in the fourth quarter."

According to Crane Data's analysis of ICI's data, the U.S. maintained its position as the largest money fund market in Q4'13 with $2.718 trillion (down to 57.9% of all worldwide MMF assets); assets increased by $37.8 billion in Q4'13 (they were up by $24.8B in the past year). France remained a distant No. 2 to the U.S. with $436.6 billion (9.3% of worldwide assets, down $6.0 billion in Q4, down $43.3B over 1 year, and down a shocking $256.6 billion since the end of 2009). This was followed by Ireland ($367.5 billion, or 7.8% of total assets, up $4.5B in Q4 and down $11.9B over 12 months). Australia remained in 4th place in the latest quarter, though it saw a drop of $4.8 billion in the quarter and $6.2B over the past year to $338.6B (7.2%), and Luxembourg remained in 5th place with $320.7B, or 6.8% of the total (down $925 million in Q4 and down $21.7B for 1 year).

China continued its dramatic money fund growth in Q4 of 2013. The 6th largest money fund country saw assets jump again; China now reports $123.5B in total, up a massive $43.6 (54.6%) in Q4 (after rising $30.4B in Q3) and up $31.7 billion in 2013. See our March 10 Link of the Day, "WSJ on Chinese Online 'Money Funds'". (The WSJ article said, "Online money-market funds, which aren't subject to the limits, have been able to offer substantially higher returns.... Chinese e-commerce giant Alibaba Group Holding Ltd. launched an online money-market fund called Yu'e Bao last June, and the fund had attracted more than 400 billion yuan ($65.4 billion) as of the mid-February. Savings accounts offer a minuscule interest rate of 0.35% a year while a one-year fixed deposit can pay 3.3%. Yu'e Bao and other similar products provided by tech companies are offering about 6% a year.")

The latest Worldwide statistics also show Korea ($63.9B, down $5.0B and up $3.8B on the quarter and year, respectively), Mexico ($52.9B, down $3.0B and down $3.2B), and Brazil ($46.6B, down $4.2B and up $2.2B) remaining in the 7th through 9th largest money fund market spots. But India rebounded to 10th place with a jump of $9.8B (to $29.3B), moving ahead of Taiwan ($27.6B) and Canada ($26.3B). South Africa, Chile, Switzerland, Japan, Sweden, Finland, Italy, and Norway also ranked among the 20 largest countries that have money market mutual funds.

Ireland and Luxembourg's totals are primarily "offshore" money funds marketed to global multinationals, while most of the other countries in the survey have primarily domestic money fund offerings. (Crane Data believes that some of these countries, like France and Italy, do not have true "money market funds" due to their lack of strict guidelines and "accumulating" NAVs instead of stable NAVs. Contact us if you'd like our latest "Largest Money Market Funds Markets Worldwide" spreadsheet based on ICI's data.)

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