Wednesday, November 21, 2007

Investment Companies Growth in USA in 2006

Registered investment companies managed a record $11.2 trillion at year-end 2006 (Figure 1.1), about a $1.7 trillion increase from 2005. Mutual funds, accounting for 93 percent of total investment company assets, held $10.4 trillion. By year-end 2006, closed-end fund assets totaled $298 billion; exchange-traded funds (ETFs), $423 billion; and unit investment trusts (UITs), $50 billion.

Investment performance fueled much of the growth in fund assets during 2006. Broad U.S. stock price indexes rose about 14 percent, leading to positive investment performance for funds investing in U.S. stocks. Rising stock prices abroad also boosted the returns on funds investing in foreign stocks, with broad foreign stock indexes rising about 24 percent.

Shareholders added $474 billion of net new cash to their mutual funds—just shy of the record for investor inflows to these funds set in 2001—and reinvested $181 billion in dividends in these funds. Continued demand for mutual funds in retirement accounts and strong stock market returns supported flows into stock, bond, and hybrid mutual funds. Rising short-term interest rates also helped to spur household and business demand for money market funds in 2006.

Net issuance of ETF shares, which includes reinvested dividends, totaled a record $74 billion in 2006. Excluding share buybacks, closed-end funds issued $12 billion in new shares during 2006, and UITs had gross issuance of $29 billion, which also excludes any liquidation of UITs. fact book of 2007

No comments: