Mutual funds boast banner year

Mutual funds marched their way through a successful year in 2007, reaching record levels of growth, according to a report from Strategic Insight Mutual Fund Research and Consulting LLC. Asset levels hit $13 trillion by December 2007, gaining approximately $1.8 trillion from the beginning of the year. This gain was the largest ever, beating the previous record of $1.6 trillion during 2006. Aggregate net flows also hit record levels, according to Strategic Insight’s report. Flows for stock, bond and money market funds neared $950 billion last year. Meanwhile, mutual fund investors also fared well: On average, stock fund investors earned 10% last year, while those in U.S. equity funds gained 8%, according to the New York-based research group. Growth-style funds beat their value cousins by more than 12%, while bond fund investors brought in 5% on average. Exchange traded funds picked up $120 billion in net flows, while money market funds gained about $600 billion. Closed end mutual funds grew to $28 billion in inflows, in line with the previous record set five years ago. Success came from the international funds: Not only did actively-managed international equity funds near the $200 billion mark, but they also raked in 18% in returns, on average. On a global level, mutual fund managers handle more than $27 trillion, as the industry grew by $3 trillion in 2007.