Mutual fund assets worldwide stood at US$11.56 trillion at the end of second quarter of 2002 down 1.7% since the end of the first quarter, according to information compiled by the Investment Company Institute.

The second-quarter decline in assets was moderated by weakness in the U.S. dollar. Measured in domestic currencies, assets in 25 of the 36 reporting countries moved lower in the second quarter. However, only eight of the countries posted lower dollar-valued assets, as the drop in the U.S. dollar converted non-dollar-denominated assets in many countries into higher dollar values.

“Mutual fund assets worldwide remain at very high levels globally,” says Tom Hockin, Investment Funds Institute of Canada president & CEO. “All countries have seen some marginal decrease but the industry remains huge at over $US 11.5 trillion.”

Mutual funds collectively experienced an outflow of US$16 billion in the second quarter of 2002. Only money market funds, however, saw redemptions exceed sales and, within this group of funds, the US$57 billion outflow was concentrated in the United States. Money market funds also experienced an outflow in the first quarter amounting to US$27 billion. Despite weakness in stock markets, equity funds posted an inflow of US$21 billion in the second quarter, down from US$80 billion in the first quarter. Bond and balanced/mixed funds saw small inflows in the second quarter.

The number of funds totaled 52,428 at the end of the second quarter of 2002. Assets of equity funds were US$4.82 trillion at the end of the second quarter, down 8.1% since the end of the first quarter. The decline reflected falling stock prices throughout the world. Assets of other types funds rose over the quarter. Bond funds posted a 6.1% gain in assets, while assets of money market funds and balanced/mixed funds rose 1.8% and 0.7%, respectively.

At the end of the second quarter of 2002, assets of equity funds represented 42% of all worldwide mutual fund assets. Money market funds accounted for 26%; bond funds, 20%; balanced/mixed funds, 8%; and other/unclassified, 4%.