Flow of New Funds Slows to a Drip
The fund business is getting tougher, and that's good news for you.
Amid shriveled returns and sales, the pace of new mutual fund launches last year fell to its lowest level in more than 20 years. The number of mutual funds rose by just 165, according to the latest figures from the Investment Company Institute, the fund industry's largest trade group. The modest uptick underscores the glut of funds out there, the maturing industry's consolidation and flagging interest in funds after two tough years for stock investors.
This trend shouldn't rattle fund investors, however. As we said in a November column, Main Street investors will only benefit from heightened competition for their money. Of course, the news isn't as good for the fund managers who will inevitably find less demand for their services.
Man From Atlantis
The shrinking number of new offerings is no doubt related to the ocean of funds already out there. At the end of last year, there were than 8,300 stock, bond and money market funds, more than double the total 10 years ago, according to the ICI. And the slimming trend should continue because more than half of those funds are stock funds, which haven't seen the same winnowing as bond funds.
Consolidation and a lousy market have slackened
the flow of new funds
|Source: Investment Company Institute.|
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV