Insight November 2003 Monthly Update

“This issue of Insight—with our last research article for 2003—checks the state of the investment funds industry as measured by several key statistics. We then update our ongoing Honour Roll of best sellers and, one by one, identify 2003’s big winners. Basically, while the stock markets came roaring back this year, investors did not. The bear-induced sales drought has now hit nearly all industry participants. Overall gross revenues (as measured by MER revenues) fell last year for the first time since we started collecting this data. The good news is that redemptions are also down. In general, investors have been neither buyers nor sellers. It has been a year of waiting for them—and for fund vendors. In Figure 1 we see that, despite pervasive doom, long-term funds were still positive in terms of net new money—just barely positive, but positive nonetheless. Gross sales exceeded redemptions by $2.4 billion. That was down markedly from prior years in both absolute dollars and as a percentage of beginning assets. It continued the deceleration that began after the start of the new millennium brought the stock market bear out of hibernation.”