Fund managers suffer as inflows dry up

Theretail funds management industry has suffered its worst quarter of net inflows since March 1995, with only $435 million of new funds being channelled into the industry over the March 2003 quarter.

The latestAssirtMarket Share Report says it was also the first time quarterly inflows have dropped below the $1 billion mark since March 1996.

Net inflows were down 65 per cent on the already weak December 2002 quarter flows of $1.2 billion, and were 85 per cent lower than the corresponding quarter last year when $3.1 billion in new monies were invested.

Net inflows for the 12 months to the end of March 2003 were $9.4 billion — 43 per cent lower than the same period last year, which came in at $16.6 billion.

The weak fund inflows, coupled with a continued decline in global equity markets, resulted in the fall of total retail managed funds from $236.4 billion in assets in December 2002 to $234.3 billion, down 2.2 per cent on the March 2002 figure of $239.5 billion.

Assirt says investors sat on the sidelines as the dual impact of continued falling equity markets and uncertainties over the war with Iraq dented their confidence.

For individual fund managers, Assirt says inflows were weak across the board, with many managers recording net outflows for the quarter. The largest net inflows were reported byUBS Global Asset Management, with $469 million in inflows being driven by strong movement into its Australian share funds.