1、2023FactBookA Review of Trends and Activities in the Investment Company IndustryINVESTMENT COMPANYwww.icifactbook.orgTotal worldwide assets invested in regulated open-end funds:*$60.1 trillionUnited StatesEuropeAsia-PacificRest of the world$28.6 trillion$19.1 trillion$9.1 trillion$3.4 trillionUS-reg

2、istered investment company total net assets:$28.9 trillionMutual fundsExchange-traded fundsClosed-end fundsUnit investment trusts$22.1 trillion$6.5 trillion$252 billion$73 billionUS retirement marketTotal retirement market assetsPercentage of households with tax-advantaged retirement savingsDC plan

3、and IRA assets invested in mutual funds$33.6 trillion72%$10.1 trillionUS-registered investment companies share of:US corporate equityUS and foreign corporate bondsUS Treasury and government agency securitiesUS municipal securitiesCommercial paper33%23%12%27%17%US household ownership of US-registered

4、 fundsNumber of households owning fundsNumber of individuals owning fundsPercentage of households owning fundsMedian mutual fund assets of mutual fundowning householdsMedian number of mutual funds owned71.7 million120.5 million54.7%$125,0003*Regulated open-end funds include mutual funds,exchange-tra

5、ded funds(ETFs),and institutional funds.2022 Facts at a Glance2023FactBookA Review of Trends and Activities in the Investment Company IndustryINVESTMENT COMPANYThe Investment Company Institute(ICI)is the leading association representing regulated investment funds.ICIs mission is to strengthen the fo

6、undation of the asset management industry for the ultimate benefit of the long term individual investor.Its members include mutual funds,exchange-traded funds(ETFs),closed-end funds,and unit investment trusts(UITs)in the United States,and UCITS and similar funds offered to investors in Europe,Asia,a

7、nd other jurisdictions.ICI has offices in Washington,DC,Brussels,London,and Hong Kong and carries out its international work through ICI Global.Sixty-third editionISBN 1-878731-70-XCopyright 2023 by the Investment Company Institute.All rights reserved.2023FactBookA Review of Trends and Activities in

8、 the Investment Company IndustryINVESTMENT COMPANYwww.icifactbook.org2023 INVESTMENT COMPANY FACT BOOK viii Letter from the Chief Economist x ICI Senior Research Staff and Acknowledgments 2 CHAPTER ONEWorldwide Regulated OpenEnd Funds 16 CHAPTER TWOUSRegistered Investment Companies 34 CHAPTER THREEU

9、S Mutual Funds 52 CHAPTER FOURUS ExchangeTraded Funds 62 CHAPTER FIVEUS ClosedEnd Funds 72 CHAPTER SIXUS Fund Expenses and Fees 84 CHAPTER SEVENCharacteristics of US Mutual Fund Owners 94 CHAPTER EIGHTUS Retirement and Education SavingsContentsviviiCONTENTSAppendices116 APPENDIX AHow USRegistered In

10、vestment Companies Operate and the Core Principles Underlying Their Regulation140 APPENDIX BSignificant Events in Fund History2023 INVESTMENT COMPANY FACT BOOKEach year,ICIs Investment Company Fact Book seeks to bring you a wealth of data about and an update on our industry.Producing the book is a l

11、abor of love,requiring the effort of virtually everyone in ICIs Research Department and Strategic Communications Department.It also depends critically on ICI member firms,who provide so much of the data.The process starts anew for next years version almost as soon as the ink is dry on this years.The

12、 effort is worth it,however,as we receive many comments from the media,regulators,academics,legislators,and industry professionals about the importance of the Fact Book as a necessary resource.Speaking of ink drying(or,in this case,not drying),we are going paperless with ICIs 2023 Fact Book.We have

13、long considered such a change.But now,as the fund industry encourages Congress to pass legislation related to e-delivery,it seems especially appropriate for our Fact Book to walk the walk.Equally Letter from the Chief EconomistviiiixLETTER FROM THE CHIEF ECONOMISTimportant,shifting to a paperless Fa

14、ct Book will free up resources we can devote to enhancing users experiences.As an example,our Fact Book:Quick Facts Guidewhich we are printing for ICIs 2023 Leadership Summitprovides a snapshot of key facts.It also features QR codes that will take you to the Fact Book itself and to our comprehensive

15、 data tables(which now include even more historical data),making them just a“snapshot”away.Stay tuned and let us know how we can continue to tailor the Fact Book for todays audience.In sum,we hope you will find this 63rd edition of the Fact Book as informative as ever.It has come a long way from the

16、 first edition,which was little more than a pamphletabout the length of this years Quick Facts Guideto the vast compendium of industry statistics it is today.Best regards,Sean Collins Chief EconomistICI Research PublicationsICI is the primary source of analysis and statistical information about the

17、investment company industry.In addition to the annual Investment Company Fact Book,the Institutes Research Department released more than 300 papers,statistical reports,and ICI Viewpoints posts in 2022.You can find all this content at www.icifactbook.org/22-research.html.2023 INVESTMENT COMPANY FACT

18、BOOKxICI Senior Research StaffChief EconomistSean Collins leads the Institutes Research Department.He oversees statistical collections and research on US and global funds,financial markets,the US retirement market,financial stability,and investor demographics.Before joining ICI in 2000,Collins worke

19、d at the US Federal Reserve Board of Governors and the Reserve Bank of New Zealand.He is a member of the Group of Economic Advisors(GEA)to the European Securities and Markets Authority(ESMA).He has a PhD in economics from the University of California,Santa Barbara,and a BA in economics from Claremon

20、t McKenna College.Senior Director of Industry and Financial AnalysisRochelle(Shelly)Antoniewicz leads the Institutes research efforts on the structure and trends of the exchange-traded fund and mutual fund industries,as well as on financial markets in the United States and globally.Before joining IC

21、I,Antoniewicz spent 13 years at the Federal Reserve Board of Governors.She earned a BA in management science from the University of California,San Diego,and an MS and PhD in economics from the University of WisconsinMadison.Senior Director of Retirement and Investor ResearchSarah Holden leads the In

22、stitutes research efforts on retirement and tax policy,as well as investor demographics and behavior.Holden,who joined ICI in 1999,heads efforts to track trends in household retirement saving activity and ownership of funds,as well as other investments inside and outside retirement accounts.Before j

23、oining ICI,Holden served as an economist at the Federal Reserve Board of Governors.She has a PhD in economics from the University of Michigan and a BA in mathematics and economics from Smith College.Senior Director of Statistical ResearchJudy Steenstra oversees the collection and publication of week

24、ly,monthly,quarterly,and annual data on open-end mutual funds,as well as data on closed-end funds,exchange-traded funds,unit investment trusts,and the worldwide fund industry.Steenstra joined ICI in 1987 and was appointed director of statistical research in 2000.She has a BS in marketing from The Pe

25、nnsylvania State University.xiICI SENIOR RESEARCH STAFF AND ACKNOWLEDGMENTSAcknowledgmentsPublication of the 2023 Investment Company Fact Book was directed by James Duvall,economist,and Judy Steenstra,senior director of statistical research,working with ICIs Strategic Communications Department.Contr

26、ibutors from ICIs Research Department who developed and edited analysis,text,and data are Irina Atamanchuk,Steven Bass,Michael Bogdan,Alex Johnson,Sheila McDonald,Hammad Qureshi,Doug Richardson,Casey Rybak,Dan Schrass,and Shane Worner.Data TablesThe statistical data tables for the 2023 Investment Co

27、mpany Fact Book are available online as Excel files.The data tables contain historical information(e.g.,total net assets and number of funds)on US mutual funds,exchange-traded funds,closed-end funds,and unit investment trusts,as well as information on worldwide regulated open-end funds.This year we

28、have expanded the data tables by adding more historical data.LEARN MORE2023 Fact Book Data Tableswww.icifactbook.org/23-fb-data-tables.html1DATA TABLESMethods and Assumptions The following methods,unless otherwise specified,apply to all data in this book:Data for US-registered investment companies o

29、nly include those that report statistical information to the Investment Company Institute.Assets of these companies are at least 98percent of industry assets.Funds of funds are excluded from the data to avoid double counting.Dollars and percentages may not add to the totals presented because of roun

30、ding.Data for US-registered investment companies include exchange-traded funds that are not registered under the Investment Company Act of 1940.Long-term funds include equity funds,hybrid funds,and bond funds.Data are subject to revision.Although information or data provided by independent sources i

31、s believed to be reliable,the Investment Company Institute is not responsible for its accuracy,completeness,or timeliness.Opinions expressed by independent sources are not necessarily those of the Institute.If you have questions or comments about this material,please contact the source directly.1CHA

32、PTER2023 INVESTMENT COMPANY FACT BOOK2Worldwide Regulated Open-End FundsInvestors around the world have historically demonstrated strong demand for regulated open-end funds(referred to in this chapter as regulated funds).In the past decade,worldwide net sales of regulated funds have totaled$18.8 tri

33、llion,and fund providers have expanded the vast array of choices,offering investors more than 137,000 regulated funds.However,demand for regulated funds weakened considerably in 2022several macroeconomic and geopolitical events contributed to a sharp decrease in net sales and a 15 percent decline in

34、 total net assets.By year-end 2022,regulated funds managed$60.1 trillion in total net assets.IN THIS CHAPTER 3 What Are Regulated Funds?4 Worldwide Total Net Assets of Regulated Funds14 Size of Worldwide Regulated Funds in Global Capital Markets3WORLDWIDE REGULATED OPEN-END FUNDSWhat Are Regulated F

35、unds?The International Investment Funds Association(IIFA)defines regulated funds as collective investment pools that are substantively regulated,open-end investment funds.*Open-end funds generally are defined as those that issue new fund shares(or units)and redeem existing shares(or units)on demand.

36、Such funds are typically regulated with respect to disclosure;the form of organization(for example,as either corporations or trusts);custody of fund assets;minimum capital;valuation of fund assets;and restrictions on fund investments(such as limits on leverage,types of eligible investments,and diver

37、sification of portfolio investments).In the United States,however,regulated funds include not only open-end funds(mutual funds and exchange-traded funds ETFs),but also unit investment trusts and closed-end funds.In Europe,regulated funds include Undertakings for Collective Investment in Transferable

38、 Securities(UCITS)ETFs,money market funds,and other categories of similarly regulated fundsand alternative investment funds,commonly known as AIFs.In many countries,regulated funds may also include institutional funds(funds that are restricted to being sold to a limited number of non-retail investor

39、s),funds that offer guarantees or protection of principal(those that offer a formal,legally binding guarantee of income or capital),and open-end real estate funds(funds that invest directly in real estate to a substantive degree).At year-end 2022,fund providers globally offered 137,892 regulated fun

40、ds(Figure 1.1).Europe had the largest number of regulated funds with 44 percent of the total,while equity funds were the most common type of regulated funds(34 percent),followed by balanced/mixed funds(25 percent),which also hold equities in their portfolios.*The primary data source for worldwide re

41、gulated funds is the IIFA.In 2022,the IIFA collected data on worldwide regulated funds from 46 jurisdictions.For information on individual jurisdictions,see the statistical data tables available online at www.icifactbook.org/23-fb-data-tables.html.For more details about the IIFA data collection,see

42、Worldwide Definitions of Terms and Classifications at www.ici.org/info/ww_q3_18_definitions.xls.Data for unit investment trusts and closed-end funds are not included in this chapter;these funds are discussed in chapter 2 and chapter 5,respectively.2023 INVESTMENT COMPANY FACT BOOK4Worldwide Total Ne

43、t Assets of Regulated FundsTotal net assets of worldwide regulated funds declined sharply in 2022 after three years of robust growth(Figure 1.2).*Several significant macroeconomic and geopolitical events negatively affected worldwide capital markets in 2022,leading to a substantial decrease in the v

44、alue of the underlying stocks and bonds held by regulated funds.Along with other concerns that weighed on financial markets,these events included:ongoing global supply chain issues;Russias invasion of Ukraine;rising inflation in countries around the world;and soaring interest rates in various econom

45、ies as central banks aggressively tightened monetary policy.*In this chapter,unless otherwise noted,data for total net assets and net sales are denominated in US dollars.FIGURE1.1Number of Worldwide Regulated OpenEnd FundsPercentage of funds by region or type of fund,year-end 2022Asia-PacificType of

46、 fundRegionEuropeUnited StatesRest of the worldMoney marketOther*Balanced/MixedEquityBondNumber of worldwide regulated open-end funds:137,8922944720162225342*Other funds include guaranteed/protected funds,real estate funds,and other funds.Note:Regulated open-end funds include mutual funds,ETFs,and i

47、nstitutional funds.Source:International Investment Funds Association5WORLDWIDE REGULATED OPEN-END FUNDSWith stock markets down across the globe in 202219 percent in the United States,15 percent in Europe,and 17 percent in the Asia-Pacific region*worldwide total net assets of equity funds,which inves

48、t primarily in publicly traded stocks,decreased by 20 percent to$26.9 trillion at year-end 2022.Bond fundswhich invest primarily in fixed-income securitiessaw their total net assets decrease 16 percent over the same period,primarily reflecting capital losses on bonds in the United States and Europe

49、of 12 percent and 14 percent,respectively.In contrast,net assets of money market fundswhich are generally understood to be regulated funds that are restricted to holding short-term,high-quality debt instrumentsincreased slightly.*As measured by the Wilshire 5000 Total Market Index,the MSCI Daily Tot

50、al Return Gross Europe Index,and the MSCI Daily Total Return Gross AC Asia-Pacific Index,which are all expressed in US dollars.As measured by the S&P US Aggregate Bond Index and the ICE BofA Euro Corporate Index(expressed in euros),both of which cover investment grade securities.FIGURE1.2Total Net A

51、ssets of Worldwide Regulated OpenEnd Funds Declined to$60.1 Trillion in 2022Trillions of US dollars by type of fund,year-end202220216.315.53.53.38.08.05.24.926.911.58.98.838.236.470.915%19%12%45%Money marketOther1BondBalanced/MixedEquityTotal number of worldwide regulated open-

52、end funds106,06097,371113,226122,561131,793137,892125,70149.354.762.960.14.75.221.84.810.45.96.424.54.811.86.96.77.613.18.35.628.38.613.78.86.133.67.15.79%1 Other funds include guaranteed/protected funds,real estate funds,and other funds.2 Data for Russia are for 2017:Q3.Note:Regulated open-end fund

53、s include mutual funds,ETFs,and institutional funds.Source:International Investment Funds AssociationLEARN MORE2023 INVESTMENT COMPANY FACT BOOK6Total net assets of worldwide regulated funds also varied widely by geographic region(Figure 1.3).At year-end 2022,the majority of worldwide total net asse

54、ts in regulated funds continued to be held in the United States(48 percent)and Europe(32 percent).Strong regulatory frameworks in both jurisdictions have contributed to their success.In recent decades,US regulated funds have been bolstered by their availability as investment options in tax-advantage

55、d accounts,such as 401(k)plans.Meanwhile,the UCITS framework has many provisions that allow for the pooling of assets.These include passporting(i.e.,a UCITS established in one country can be sold cross-border into one or more other European countries),the availability of UCITS in countries outside o

56、f Europe,and allowing different share classes to be denominated in a range of different currencies or adapted to different tax structures.Regulated funds in the Asia-Pacific region held another 15 percent of worldwide total net assets.Given the size of the population,the rapidly increasing economic

57、development and wealth in many countries,and efforts to promote individual account-based saving and investing,the regions regulated fund market has the potential for continued growth.FIGURE1.3The United States Has the Largest Share of Total Net Assets of Worldwide Regulated OpenEnd FundsTrillions of

58、 US dollars by region,year-end202220217*201520132.02.313.713.64.83.83.49.18.838.236.470.915%32%48%6%Asia-PacificEuropeUnited StatesRest of the world49.354.762.960.116.717.72.917.76.522.23.118.77.225.729.38.821.63.234.110.023.23.628.619.1*Data for Russia are for 2017:Q3.Note:Regulated open

59、-end funds include mutual funds,ETFs,and institutional funds.Source:International Investment Funds AssociationWorldwide Regulated Open-End Fund Assets and Flowswww.ici.org/research/stats/worldwide7WORLDWIDE REGULATED OPEN-END FUNDSWorldwide Net Sales of Regulated LongTerm FundsWorldwide demand for r

60、egulated long-term funds(equity,bond,balanced/mixed,and other)dropped sharply in 2022,from record net sales of$3.3 trillion in 2021 to net redemptions of$155 billion in 2022(Figure 1.4).However,the aggregate data masks different regional experiences.While regulated long-term funds in both the United

61、 States and Europe experienced net outflows for the first time in more than a decade($191billion and$225 billion,respectively),regulated long-term funds in the Asia-Pacific region and the rest of the world continued to experience net inflows,with flows in the Asia-Pacific region driven largely by in

62、flows in China and Japan.FIGURE1.4Net Sales of Regulated OpenEnd LongTerm Funds Decreased in 2022Billions of US dollars by region,annual-50005001,0001,5002,0002,5003,0003,5002000022Total worldwide net salesAsia-PacificEuropeUnited StatesRest of the world1,2871,6281,5

63、871,1382,1229741,4641,3393,265-155Note:Regulated open-end funds include mutual funds,ETFs,and institutional funds.Long-term funds include equity funds,balanced/mixed funds,bond funds,and other funds(guaranteed/protected,real estate,and other funds),but exclude money market funds.Source:International

64、 Investment Funds Association2023 INVESTMENT COMPANY FACT BOOK8Worldwide net sales of regulated long-term funds declined significantly across all fund categories in 2022 when compared with 2021.For example,worldwide net sales of equity funds decreased from net inflows of$1.1 trillion in 2021 to net

65、outflows of$4 billion in 2022(Figure 1.5).The substantial slowdown in net sales was likely associated with the negative returns on global stocks,as net flows to equity funds have historically been related to world equity returns.Bond funds also experienced a major shift in net sales,going from net i

66、nflows of$1.2 trillion in 2021 to net outflows of$261 billion in 2022(Figure 1.5).This reversal was primarily driven by developments in inflation and interest rates.Inflation across the globe rose considerably during 2022reaching 40-year highs in many countriespowered mainly by an increase in the pr

67、ices of energy and goods,which later broadened out to food and core services.In response,central banks tightened monetary policy by engaging in earlier and steeper-than-expected interest rate hikes.For example,in 2022,the European Central Bank raised official rates 2.50 percentage points over four s

68、eparate hikes,while the Bank of England raised rates 3.25 percentage points over eight hikes.In the United States,the Federal Reserve was even more aggressive and raised the benchmark interest rate by 4.25 percentage points over seven rate increases.The Riksbank,Norges Bank,and Swiss National Bank a

69、lso raised interest rates in 2022 to help curb inflation.The cycle of tightening monetary policy among these developed economies is important because when interest rates rise,bond prices fall.This caused the value of bonds in these jurisdictions to decrease,which led to capital losses on bond funds.

70、Like the experience with equity fund returns and flows,net flows to bond funds have historically been related to bond returns(see Figure 3.5).9WORLDWIDE REGULATED OPEN-END FUNDSFIGURE1.5Worldwide Net Sales of Regulated OpenEnd LongTerm Funds Decreased Across All Asset Classes in 2022Billions of US d

71、ollars by type of fund,annual-50005001,0001,5002,0002,5003,0003,5002000022Total worldwide net salesOther*BondBalanced/MixedEquity1,2871,6281,5871,1382,1229741,4641,3393,265-155*Other funds include guaranteed/protected funds,real estate funds,and other funds.Note:Regu

72、lated open-end funds include mutual funds,ETFs,and institutional funds.Source:International Investment Funds AssociationLEARN MORE2023 INVESTMENT COMPANY FACT BOOK10Ongoing Charges for UCITS in the European UnionThe UCITS Directive has become a global success story since its adoption in 1985,with ne

73、t assets of 9.9 trillion in EU-domiciled UCITS at year-end 2022.Investments in these funds are held by investors in Europe and other jurisdictions worldwide.In recent years,there has been renewed interest in the costs and charges paid by shareholders of investment funds.In 2019,the European Securiti

74、es and Markets Authority(ESMA)issued its first annual report on the costs and charges of retail investment products in the European Union following a mandate by the European Commission.ESMA has since published other reports related to costs and charges.For example,in January 2021,ESMA launched a Com

75、mon Supervisory Action(CSA)in conjunction with European national regulators on the supervision of fees and costs of UCITS.In May 2022,ESMA released a report outlining the results of this exercise.*Like regulated fund investors in other countries,UCITS investors incur ongoing charges that cover the p

76、rovision of services,including portfolio management,administration,compliance,accounting,legal,and distribution.The total cost of these charges is disclosed to investors through either the total expense ratio(TER),often found in a UCITS annual report and other marketing documents,or the ongoing char

77、ges figure(OCF),found in the Key Investor Information Document(KIID).Average ongoing charges of equity and fixed-income UCITS continued their downward trend in 2021(Figure 1.6).Since 2013,asset-weighted average ongoing charges for equity and fixed-income UCITS have declined 19 percent and 31 percent

78、,respectively.In 2021,the asset-weighted average ongoing charge for equity funds fell to 1.21 percent from 1.24percent in 2020.In other words,for every 100 invested in 2021,fund shareholders were charged 1.21 in ongoing fees.Additionally,the asset-weighted average ongoing charges for equity and fixe

79、d-income funds were below their respective simple averages,which indicates that investors tend to concentrate their assets in lower-cost funds.CONTINUED ON THE NEXT PAGE*European Securities and Markets Authority,“Final Report on the 2021 CSA on costs and fees.”Available at www.esma.europa.eu/sites/d

80、efault/files/library/esma34-45-1673_final_report_on_the_2021_csa_on_costs_and_fees.pdf.Trends in the European Investment Fund Industrywww.efama.org/node/50111WORLDWIDE REGULATED OPEN-END FUNDSLEARN MORECONTINUED FROM THE PREVIOUS PAGEFIGURE1.6Investors in UCITS Pay BelowAverage Ongoing ChargesPercen

81、tEquityFixed incomeSimple average ongoing chargeAsset-weighted average ongoing charge20221202020131.731.421.461.120.951.491.240.980.930.720.681.21Note:Data exclude ETFs.Source:Investment Company Institute calculations of Morningstar Direct data.See ICI Research Perspective,“Ongoing Charge

82、s for UCITS in the European Union,2021.”Ongoing Charges for UCITS in the European Union,2021www.ici.org/files/2022/per28-08.pdf2023 INVESTMENT COMPANY FACT BOOK12Worldwide Net Sales of Money Market FundsWorldwide net sales of money market funds totaled$171 billion in 2022,down from$673 billion in 20

83、21(Figure 1.7).The decline in worldwide demand for money market funds was largely driven by a decrease in net sales in the United States and the Asia-Pacific region.Investor demand for money market funds in the United States decreased from$424 billion in 2021 to$10 billion in 2022;and in the Asia-Pa

84、cific region,money market funds experienced net inflows of$132 billion in 2022,down from$254 billion in 2021.Investors use money market funds because they are professionally managed,tightly regulated vehicles with holdings limited to high-quality,short-term debt instruments.As such,they are highly l

85、iquid,attractive,cash-like alternatives to bank deposits.Generally,demand for money market funds is dependent upon their yields and interest rate risk exposure relative to other high-quality fixed-income securities.In the United States,net sales of money market funds fell as purchases by retail inve

86、stors were offset by redemptions from institutional investors(see Figure 3.14).In 2022,short-term interest rates ramped up quickly in the United States,and in the second half of 2022,were higher than longer-dated fixed-income securities.US retail investors were particularly attracted to the relative

87、ly high yields and extremely low interest rate risk offered by money market funds,especially in light of the double-digit capital losses seen in stock and bond markets.By contrast,US institutional investors,on net,redeemed cash from money market funds.This development is consistent with historical p

88、atterns in institutional money market fund flows during a monetary policy tightening cycle.Because of their size and investment knowledge,some institutional investors can easily invest directly in short-term instruments.This allows those institutional investors to capture higher yields immediately w

89、hen the Federal Reserve raises the federal funds rate rather than waiting for the yield in a money market fund to catch up as older,lower-yielding short-term securities mature and are replaced with newer,higher-yielding paper.Demand for money market funds in the Asia-Pacific region is dominated by C

90、hinese money market funds,which hold the bulk of money market fund total net assets in the region.The Peoples Bank of China lowered interest rates in the summer of 2022,as Chinas economy was affected by the governments zero-COVID policy.As a result,net inflows into money market funds in the Asia-Pac

91、ific region in the first half of 2022 turned to net outflows,lowering the overall net sales of money market funds in the region for the year.13WORLDWIDE REGULATED OPEN-END FUNDSFIGURE1.7Worldwide Net Sales of Money Market Funds Decreased in 2022Billions of US dollars by region,annual06171

92、-174051,295673Total worldwide net salesAsia-PacificEuropeUnited StatesRest of the world200019202020,0001,500Source:International Investment Funds Association2023 INVESTMENT COMPANY FACT BOOK14Size of Worldwide Regulated Funds in Global Capital MarketsRegulated fu

93、nds continue to be an important conduit for allocating capital globally,helping finance businesses,governments,and household activities.As of year-end 2022,worldwide capital markets,as measured by the value of equity and debt securities outstanding,totaled$233.3 trillion,with regulated funds holding

94、 26 percent,or$60.1 trillion(Figure 1.8).The share of worldwide capital markets held by regulated funds has grown somewhat over the past decade.In 2022,worldwide regulated funds held 26 percent of worldwide capital markets,compared with 21 percent in 2012(Figure 1.8).A wide range of other investorss

95、uch as central banks,sovereign wealth funds,pension plans(both defined benefit and defined contribution),banks,insurance companies,hedge funds,broker-dealers,and households owning stocks and bonds directlyheld the remaining 74 percent in 2022.FIGURE1.8Worldwide Regulated Funds Held 26 Percent of Wor

96、ldwide Equity and Debt MarketsTrillions of US dollars,year-end20122022*Other investorsTotal net assets of worldwide regulated open-end funds118.632.3173.260.121%26%233.3150.9*Data for worldwide debt markets are as of September 30,2022.Note:Regulated open-end funds include mutual funds,ETFs,and insti

97、tutional funds.Source:Investment Company Institute calculations of data from the International Investment Funds Association,World Federation of Exchanges,and Bank for International Settlements15WORLDWIDE REGULATED OPEN-END FUNDSFund Ownership in Market-Based Versus Bank-Based Economies Generally spe

98、aking,a jurisdictions financial system can be described as either market-based or bank-based,depending on how its economy deploys savings and raises capital for the production of goods and services.For example,many jurisdictions within the European Union are considered bank-based economies,since ban

99、ks are more often used to mobilize investor savings and allocate capital.Conversely,the United States is usually considered a market-based economy,since capital markets are the main conduit for investor savings and deploying capital.The structure of capital allocation in an economy is a factor that

100、can influence the demand for regulated funds,and regulated funds tend to make up a greater share of household wealth in market-based economies.In the European Union and Japan,where investors have traditionally allocated savings and capital to banks,households hold more of their financial wealth in b

101、ank products.European and Japanese households hold 35 percent and 55 percent,respectively,of their financial wealth in bank products,with relatively little in regulated funds(Figure 1.9).By comparison,households in the United States hold a much lower share of their financial wealth in bank products

102、and a much larger share in regulated funds.FIGURE1.9US Households Hold More of Their Wealth in Regulated Funds;BankBased Countries Have a Lower SharePercentage of household1 financial wealth,year-end 2022553520JapanEuropean Union3United States14104Bank deposits and currencyRegulated funds21 Househol

103、ds include households and nonprofit institutions serving households.2 For the United States,regulated funds include total net assets held by mutual funds and ETFs.For the European Union and Japan,regulated funds include investment fund shares as defined by their respective systems of national accoun

104、ts.3 Data for Poland are as of 2022:Q3.Sources:Investment Company Institute,Federal Reserve Board,Eurostat,and Bank of Japan2CHAPTER2023 INVESTMENT COMPANY FACT BOOK16US-Registered Investment CompaniesRegistered investment companies are an important segment of the asset management industry in the Un

105、ited States.US-registered investment companies play a major role in the US economy and financial markets,and a growing role in global financial markets.These funds managed$28.9 trillion in total net assets at year-end 2022,largely on behalf of more than 120 million USretail investors.The industry ha

106、s experienced robust growth over the past quarter century from asset appreciation and strong demand from households due to rising household wealth,the aging US population,and the evolution of employer-based retirement systems.US funds supply investment capital in securities markets around the world

107、and are important investors in the US stock and municipal securities markets.IN THIS CHAPTER17 Number and Assets of Investment Companies19 Americans Continued Reliance on Investment Companies 20 Role of Investment Companies in Financial Markets22 Growth of Index Funds26 Fund Complexes and Sponsors31

108、 Environmental,Social,and Governance Investing17US-REGISTERED INVESTMENT COMPANIESNumber and Assets of Investment CompaniesThere were 16,159 investment companies*offered by US financial services companies at year-end 2022(Figure 2.1).The overall number of investment companies is down from a decade a

109、go as an increase in the number of exchange-traded funds(ETFs)only partially offset a decrease in the number of unit investment trusts(UITs)and closed-end funds.*The terms investment companies and US investment companies are used at times throughout this book in place of USregistered investment comp

110、anies.US-registered investment companies are open-end mutual funds,exchange-traded funds,closed-end funds,and unit investment trusts.FIGURE2.1Most Investment Company Total Net Assets Are in Mutual FundsYear-end 20223,966Unit investment trusts$252Closed-end funds8,763Mutual funds1$22,110Mutual funds$

111、6,477Exchange-traded funds2,989Exchange-traded fundsTotal number of funds:16,159 Total net assets:$28,912 Number of funds441Closed-end funds$73Unit investment trustsTotal net assets3Billions of dollars1 Mutual fund data for number of funds include mutual funds that invest primarily in other mutual f

112、unds.2 ETF data for number of funds include ETFs that invest primarily in other ETFs.3 Total investment company assets include mutual fund holdings of closed-end funds and ETFs.4 Closed-end fund data for total net assets include preferred share classes.LEARN MORE2023 INVESTMENT COMPANY FACT BOOK18To

113、tal net assets in US-registered investment companies decreased in 2022 to a year-end level of$28.9 trillion,with the vast majority held by mutual funds and ETFs.US-registered investment company total net assets were concentrated in long-term funds,with equity funds alone holding$16.6trillion57 perce

114、nt of all investment company total net assets at year-end 2022(Figure 2.2).Domestic equity funds(those that invest primarily in shares of US corporations)held$12.8 trillion in net assets;world equity funds(those that invest significantly in shares of non-US corporations)accounted for$3.8 trillion.Bo

115、nd funds held$5.9 trillion in assets,while money market funds,hybrid funds,and other fundssuch as those that invest primarily in commoditiesheld the remaining$6.4trillion.During 2022,mutual funds recorded an aggregate$1.1 trillion in net outflows,mainly occurring in long-term mutual funds(see Figure

116、 3.3).Mutual fund shareholders reinvested$330 billion in income dividends and$380 billion in capital gains distributions that mutual funds paid out during the year.Investors continued to show strong demand for ETFs,with net share issuance(which includes reinvested dividends)totaling$609 billion in 2

117、022(see Figure 4.4).UITs experienced net new deposits of$51 billion,a slight decrease from the previous year,and closed-end funds had net redemptions of$489 million(see Figure 5.2).FIGURE 2.2The Majority of Investment Company Total Net Assets Were in Equity FundsPercentage of total net assets,year-e

118、nd 202244%Domestic equity funds 20%Bond funds13%World equity funds17%Money market funds6%Hybrid and other funds1Investment company total net assets:2$28.9 trillion1 The other funds category includes ETFsboth registered and not registered under the Investment Company Act of 1940that invest primarily

119、in commodities,currencies,and futures.2 Closed-end fund data for total net assets include preferred share classes.Monthly Trends in Mutual Fund Investingwww.ici.org/research/stats/trendsLEARN MORE19US-REGISTERED INVESTMENT COMPANIESAmericans Continued Reliance on Investment CompaniesHouseholds make

120、up the largest group of investors in funds,and registered investment companies managed 20.7 percent of household financial assets at year-end 2022(Figure 2.3).The growth of mutual funds inside individual retirement accounts(IRAs)and defined contribution(DC)plans,particularly 401(k)plans,explains som

121、e of the increased household reliance on investment companies in the past three decades.Mutual funds in IRAs and DC plans made up about 9.2 percent of household financial assets at year-end 2022,up from 1.3 percent in 1990.Businesses and other institutional investors also rely on funds.For instance,

122、institutions can use money market funds to manage some of their cash and other short-term assets.Institutional investors also have contributed to the growing demand for ETFs.Investment managersfor mutual funds,pension funds,hedge funds,and insurance companiesuse ETFs to invest in markets,manage liqu

123、idity and investor flows,or hedge their exposures.FIGURE2.3Households Rely More on Investment CompaniesPartly from Increased Holdings Inside DC Plans and IRAsPercentage of US household financial assets,year-end19902022Other household financial assets held in registered investment companies1Mutual fu

124、nds in IRAs and DC plans20.71.37.39.26.011.61 Household financial assets held in registered investment companies include holdings of mutual funds,ETFs,closed-end funds,and UITs.Mutual funds held in employer-sponsored DC plans,IRAs,and variable annuities are included.2 DC plans include private-sector

125、 employer-sponsored DC plans(such as 401(k)plans),403(b)plans,and 457 plans.Source:Investment Company Institute.For a complete list of sources,see Investment Company Institute,“The US Retirement Market,Fourth Quarter 2022.”The US Retirement Marketwww.ici.org/research/stats/retirementLEARN MORE2023 I

126、NVESTMENT COMPANY FACT BOOK20Role of Investment Companies in Financial MarketsInvestment companies have been important investors in domestic financial markets for much of the past 30 years.They have held a largely stable share of the securities outstanding across a variety of asset classes in recent

127、 years,mainly through mutual funds.At year-end 2022,investment companies held 33 percent of US corporate equities outstanding,little changed from the 34percent at year-end 2019(Figure 2.4).Investment companies held 23 percent of bonds issued by US corporations and foreign bonds held by US residents

128、at year-end 2022 and 12 percent of the US Treasury and government agency securities outstanding(Figure 2.4).Investment companies also have been important investors in the US municipal securities market,holding 27 percent of the securities outstanding at year-end 2022.Finally,mutual funds(primarily p

129、rime money market funds)held 17 percent of the US commercial paper marketa critical source of short-term funding for many major corporations around the world.Money Market Fund Resource Centerwww.ici.org/mmfs21US-REGISTERED INVESTMENT COMPANIESFIGURE2.4Investment Companies Channel Investment to Stock

130、,Bond,and Money MarketsPercentage of total market value of securities held by investment companies,year-end202220222202222022220222202120202019US corporateequityUS and foreigncorporate bonds*US Treasury andgovernment agencysecuritiesUS municipalsecuritiesC

131、ommercialpaperLong-term mutual fundsMoney market fundsOther registered investment companies262323898362324222369754262026272924753422*Money market fund holdings of US and foreign corporate bonds rounded to less than 0.1 percent in all

132、 years.Sources:Investment Company Institute,Federal Reserve Board,and World Federation of Exchanges2023 INVESTMENT COMPANY FACT BOOK22Growth of Index FundsIndex funds are designed to track the performance of a market index.To do this,the fund manager purchases all the securities in the index or a re

133、presentative sample of themmirroring the index compositionso that the performance of the fund tracks the value of the index.This approach to portfolio management is the primary reason that index funds tend to have below-average expense ratios(see Figures 6.6 and 6.7).Index mutual funds were first of

134、fered in the 1970s,followed by index ETFs in the 1990s.By year-end 2022,total net assets in these two index fund categories had grown to$10.9 trillion.Along with this growth,index fund assets have become a larger share of overall fund assets.At year-end 2022,index mutual funds and index ETFs togethe

135、r accounted for 46 percent of assets in long-term funds,up from 22 percent at year-end 2012(Figure 2.5).Nevertheless,actively managed funds still accounted for more than half of long-term fund assets(54 percent)at year-end 2022.FIGURE2.5Index Funds Have Grown as a Share of the Fund MarketPercentage

136、of total net assets,year-end20122022Actively managed mutual funds and ETFsIndex ETFsIndex mutual funds782%46%Total net assets$11.6 trillion$23.7 trillionNote:Data for ETFs exclude non1940 Act ETFs.Data for mutual funds exclude money market funds.23US-REGISTERED INVESTMENT COMPANIESThe gro

137、wth in index funds has been concentrated in funds that invest primarily in US equities,with 44percent of inflows into index funds over the past decade going to domestic equity funds.But despite their significant growth,index domestic equity mutual funds and ETFs remain relatively small investors in

138、the US stock markets,holding only 18 percent of the value of US stocks at year-end 2022(Figure 2.6).Actively managed domestic equity mutual funds and ETFs held another 14percent,while other investorsincluding hedge funds,pension funds,life insurance companies,and individualsheld the majority(69 perc

139、ent).FIGURE2.6Index Fund Share of US Stock Market Is SmallPercentage of US stock market capitalization,year-end20222020012Other investorsActively managed domestic equity mutual funds and ETFsIndex domestic equity mutual funds and ETFs81121771111

140、872861470Sources:Investment Company Institute and World Federation of Exchanges2023 INVESTMENT COMPANY FACT BOOK24Unit Investment TrustsUnit investment trusts(UITs)are registered investment companies with characteristics of both mutual funds and closed-end funds.Like mutual fun

141、ds,UITs issue redeemable shares(called units),and like closed-end funds,they typically issue a specific,fixed number of shares.But unlike either mutual funds or closed-end funds,UITs have a preset termination date based on the portfolios investments and the UITs investment goals.UITs investing in lo

142、ng-term bonds might have a preset termination date of 20 to 30 years,depending on the maturity of the bonds they hold.UITs investing in stocks might seek to capture capital appreciation in a few years or less.When a UIT terminates,proceeds from the securities are paid to unit holders or,at a unit ho

143、lders election,reinvested in another trust.UITs fall into two main categories:bond(or debt)trusts and equity trusts.Bond trusts are classified as taxable or tax-free;equity trusts are classified as domestic or international/global.The first UIT,introduced in 1961,held tax-free bonds,and historically

144、,most UIT total net assets were invested in bonds.Equity UITs,however,have grown in popularity over the past three decades.At year-end 2022,assets in equity UITs far exceeded those of bond UITs,constituting 93 percent of UIT total net assets(Figure 2.7).The number of trusts outstanding has decreased

145、 as sponsors have created fewer new trusts and existing trusts have reached their preset termination dates.Federal law requires that UITs have a largely fixed portfolioone that is not actively managed or traded.Once the trusts portfolio has been selected,its composition may change only in very limit

146、ed circumstances.Most UITs hold a diversified portfolio,described in detail in the prospectus,with securities professionally selected to meet a stated investment goal,such as growth,income,or capital appreciation.Investors can obtain UIT price quotes from brokerage or investment firms and investment

147、 company websites.Some UITs list their prices on Nasdaqs Fund Network.Some broker-dealers offer their own trusts or sell trusts offered by nationally recognized independent sponsors.Units of these trusts can be bought through their registered representatives.Units can also be bought from the represe

148、ntatives of smaller investment firms that sell trusts sponsored by third-party firms.Though a fixed number of units of a UIT are sold in a public offering,a trust sponsor is likely to maintain a secondary market,where investors can sell their units back to the sponsor and other investors can buy tho

149、se units.Even absent a secondary market,UITs are required by law to redeem outstanding units at their net asset value(NAV),which is based on the underlying securities current market value.CONTINUED ON THE NEXT PAGELEARN MORE25US-REGISTERED INVESTMENT COMPANIESCONTINUED FROM THE PREVIOUS PAGEFIGURE2.

150、7Total Net Assets of UITs Have Shifted from TaxFree Debt Trusts to Equity TrustsBillions of dollars,year-end20222029951990 3,966 4,112 4,310 5,188 5,971 6,019 10,072 12,979 12,131 947853959253242489 682948144Equity trust assetsTaxable debt trust

151、 assetsTax-free debt trust assetsTotal number of trustsUnit Investment Trust Datawww.ici.org/research/stats/uit 2023 INVESTMENT COMPANY FACT BOOK26Fund Complexes and SponsorsAt year-end 2022,812 fund sponsors from around the world competed in the US market to provide investment management services t

152、o fund investors(Figure 2.8).The decline in the number of fund sponsors since year-end 2015 may be due to a variety of business decisions,including larger fund sponsors acquiring smaller ones,fund sponsors liquidating funds and leaving the business,or larger sponsors selling their advisory businesse

153、s.Prior to 2015,the number of fund sponsors had been increasing as the economy and financial markets recovered from the 20072009 financial crisis.Overall,from year-end 2012 through year-end 2022,525 sponsors entered the market while 503 left,for a net increase of 22.Many recent entrants to the fund

154、industry have adopted solutions in which the funds sponsor arranges for a third party to provide certain services(e.g.,audit,trustee,some legal)through a turnkey setup.This allows the sponsor to focus more on managing portfolios and gathering assets.Through an arrangement known as a series trust,the

155、 third party provides services to multiple independent fund sponsors under a single complex that serves as an“umbrella.”This can be cost-efficient because the costs of operating funds are spread across the combined assets of a number of funds in the series trust.The increased availability of other i

156、nvestment products has led to changes in how investors are allocating their portfolios.The percentage of mutual fund companies retaining assets and attracting net new investments generally has been lower in recent years.In 2022,26 percent of fund complexes saw positive flows to their long-term mutua

157、l funds,while 69 percent of ETF sponsors had positive net share issuance(Figure 2.9).FIGURE2.8Number of Fund Sponsors Has Generally Declined Since 200202000132012Total fund sponsors at year-endFund sponsors enteringFund sponsors leaving77438250792954485177424743 4241

158、6435565838405279082287287885284884782580482481227US-REGISTERED INVESTMENT COMPANIESThe concentration of mutual fund and ETF assets managed by the largest fund complexes has increased over time.The share of assets managed by the five largest firms rose from 35 percent at year-end 2005 to 55 percent a

159、t year-end 2022(Figure 2.10).Some of the increase in market share occurred at the expense of the middle tier of firmsthose ranked from 11 to 25whose market share fell from 21 percent in 2005 to 16 percent in 2022.FIGURE2.9Easier Access to Other Investment Products Has Dampened Inflows into LongTerm

160、Mutual FundsPercentage of fund complexes20222020012Long-term mutual fundsETFs8232886948267452877475Note:Long-term mutual fund data include net new cash flow and reinvested dividends;ETF data for net share issuance include reinvested dividends.FI

161、GURE 2.10Share of Mutual Fund and ETF Assets at the Largest Fund Complexes Has IncreasedPercentage of total net assets of mutual funds and ETFs,year-end2005200212022Largest 5 complexes354245535455Largest 10 complexes465556646668Largest 25 complexes677475818384Note:Data include only mutual

162、 funds and ETFs registered under the Investment Company Act of 1940.2023 INVESTMENT COMPANY FACT BOOK28FIGURE2.11Mutual Funds and ETFs Enter and Exit in a Competitive MarketNumber of funds20222020012Opened fundsMerged/Liquidated funds5898346936580846459857

163、4208785406837067536618Note:Data include mutual funds that do not report statistical information to the Investment Company Institute and mutual funds that invest primarily in other mutual funds.ETF data include ETFs that invest primarily in other ETFs.At least two factors have contributed

164、to the rise in industry concentration.First,the increased concentration reflects the growing popularity of index fundsthe 10 largest fund complexes manage most of the assets in index mutual funds.Actively managed domestic equity mutual funds had outflows in every year after 2005,while index domestic

165、 equity mutual funds had inflows in each of these years except for 2020 and 2021.Index domestic equity ETFs had positive net share issuance in each of these years.Second,generally strong inflows over the past decade to bond mutual funds(see Figure 3.7),which are fewer in number and are less likely t

166、o be offered by smaller fund sponsors,helped boost the share of assets managed by large fund complexes.Macroeconomic conditions and competitive dynamics can affect the supply of funds offered for sale.Fund sponsors create new funds to meet investor demand and merge or liquidate those that do not att

167、ract sufficient investor interest.A total of 691 mutual funds and ETFs opened in 2022,down from 748 in 2021 and lower than the 20122021 annual average of 731(Figure 2.11).The number of mutual fund and ETF mergers and liquidations stayed relatively flat455 in 2022 compared with 460 in 2021.29US-REGIS

168、TERED INVESTMENT COMPANIESFund Proxy Voting Reflects Heterogeneous IndustryInvestment companies are major shareholders of public companies and have held a steady share of US-issued corporate equities outstanding over the past several years(Figure 2.4).Like any company shareholder,they are entitled t

169、o vote on proxy proposals put forth by a companys board or its shareholders.Funds normally delegate proxy voting responsibilities to fund advisers,which have a fiduciary duty to vote in the best interest of fund shareholders.During proxy year 2020(the 12 months that ended June 30,2020),shareholders

170、of the 3,000 largest public companies considered 23,970 proposals98 percent(23,523)of these were proposed by management and 2 percent(447)were submitted by shareholders.Investment companies cast more than 7.6 million votes on these proposals,with each investment company voting,on average,on about 1,

171、500 separate proxy proposals.Because management proposals account for the bulk of proxy proposals,74 percent of funds votes were cast on management proposals related to uncontested elections of directors,with an additional 13 percent and 11 percent related to management proposals on management compe

172、nsation and ratification of audit firms,respectively.Investment companies voted in favor of management proposals 93 percent of the time.The strong support for management proxy proposals likely reflects that the vast majority of them are not controversial85 percent of management proposals were uncont

173、ested elections of directors and ratifications of the audit firms that companies selected.During the same proxy year,4 percent of the votes that investment companies cast were on 447 shareholder proxy proposals.Among the shareholder proposals,39 percent were related to social and environmental matte

174、rs;27 percent to board structures and elections;and the remainder to shareholder rights and anti-takeover issues,compensation matters,and miscellaneous issues.Shareholder proxy proposals received support from investment companies,on average,41 percent of the time.CONTINUED ON THE NEXT PAGELEARN MORE

175、2023 INVESTMENT COMPANY FACT BOOK30CONTINUED FROM THE PREVIOUS PAGEInvestment companies support for shareholder proposals varied considerably depending on a range of factors.These factors included,among other things,the details of the proposal,the issuer to whom the proposal applied,and the backdrop

176、 and context in which the proposal was set.Investment companies tend to offer more support for shareholder proxy proposals that are likely to increase their rights as company shareholders.For example,investment companies voted in favor of shareholder proxy proposals related to shareholder rights or

177、anti-takeover measures nearly 53 percent of the time in proxy year 2020.Investment companies,on average,have provided more limited support for social and environmental proposals.In proxy year 2020,these proposals received a favorable vote 39percent of the time.Average levels of support can mask impo

178、rtant nuances of how investment companies vote on such issues.These kinds of proposals,though classified generally as“social and environmental,”cover a wide array of issues,including the environment,diversity in hiring practices,human rights matters,and the safety of a companys business operations.I

179、n addition,these proposals must be viewed in context.For example,suppose virtually identical proposals are directed to two different companies.An investment company might view the proposal as appropriate for the first company,but inappropriate for the second because the latter has already taken step

180、s to address the proposals concerns.In short,there is no one-size-fits-all description of how funds vote,other than to say that investment companies seek to vote in the interests of their shareholders and in a way that is consistent with their investment objectives and policies.Proxy Voting Resource

181、 Centerwww.ici.org/proxy_voting LEARN MORE31US-REGISTERED INVESTMENT COMPANIESEnvironmental,Social,and Governance InvestingPerhaps one of the most significant recent global trends is the increasing attention being paid to environmental,social,and governance(ESG)matters.These matters vary widely but

182、are generally considered to include topics related to climate change,diversity and inclusion,human rights,the rights of company shareholders,and company compensation structures.The fund industry is responding to increased investor interest in ESG investing by,among other things,creating new funds th

183、at explicitly tailor their investments to specific ESG criteria.Funds consider ESG factors to varying degrees.For decades,some funds have incorporated ESG factors into their investment processes as a way to enhance fund performance,manage investment risks,and identify emerging investment risks and o

184、pportunities,just as they would consider macroeconomic or interest rate risks;idiosyncratic business risks;and investment exposures to particular companies,industries,or geographical regions.Because these funds“integrate”ESG factors into the investment process,this type of investing is known as ESG

185、integration.Funds use of ESG integration is distinct from funds use of“sustainable investing strategies,”which use ESG analysis as a significant part of the funds investment thesis as a way to pursue investment returns and ESG-related outcomes.Approaches to ESG InvestingThe investment strategies fun

186、ds use vary,as do the ways they describe their approaches.This section describes some of the most common approaches.Exclusionary investing:Investment strategies that exclude,or“screen out,”investments in particular industries or companies that do not meet certain ESG criteria.This may also be descri

187、bed as negative screening,sustainable investing,or socially responsible investing(SRI).Inclusionary investing:Investment strategies that generally seek investment returns by pursuing a strategic investing thesis focusing on investments that systematically tilt a portfolio based on ESG factors alongs

188、ide traditional financial analysis.This may also be described as best-in-class,ESG thematic investing,ESG tilt,positive screening,or sustainable investing.Impact investing:Investment strategies that seek to generate positive,measurable social and environmental impact alongside a financial return.Thi

189、s may also be described as community,goal-based,sustainable,or thematic investing.Funds Use of ESG Integration and Sustainable Investing Strategies:An Introductionwww.ici.org/system/files/attachments/pdf/20_ppr_esg_integration.pdf2023 INVESTMENT COMPANY FACT BOOK32These common approaches to ESG inve

190、sting are not mutually exclusivea single fund may use multiple approaches(e.g.,a best-in-class fund that excludes certain types of investments).As a result,seeking to classify funds that invest according to ESG criteria as solely exclusionary,inclusionary,or impact can be challenging.Applying ICIs l

191、ong-standing general approach to classifying funds enables research into these funds(e.g.,tracking data and monitoring trends).Using ICIs Approach to Classify Funds That Invest According to ESG CriteriaICI Research examines the prospectuses of funds to classify those that invest according to ESG cri

192、teria using the same approach that it does for other categories across all funds.In particular,ICI looks for language indicating that a fund places an important and explicit emphasis on environmental,social,or governance criteria to achieve certain goals.Following this approach,in 2022,881 mutual fu

193、nds and ETFs with assets of$460 billion(Figure2.12)were classified generally as investing according to exclusionary,inclusionary,or impact investing ESG criteria.The number of funds that invest according to ESG criteria has increased in each year since 2019(the year ICI began tracking data for these

194、 funds)reflecting growing investor interest in these funds.How ICI Categorizes Funds for Research and Statistical PurposesICI seeks to categorize funds as objectively as possible by applying predetermined rules and definitions to the prospectus language of mutual funds,ETFs,and closed-end funds,with

195、 a special focus on the“investment objective”and“principal investment strategies”sections.For example,ICI Research uses prospectus language to determine which of four broad categories to place a fund in:equity,bond,hybrid,or money market.Funds are then placed in subcategoriesfor example,classifying

196、equity funds as large-,mid-,or small-cap;or bond funds as investment grade or high-yield.To keep fund classifications up to date,ICI monitors funds prospectuses for material revisions.This approach produces fund classifications that are consistent and relatively stable,which is very helpful when mon

197、itoring current and historical trends in fund data.LEARN MORE33US-REGISTERED INVESTMENT COMPANIESAmong funds that use such criteria in selecting their investments,ICI classifies these funds into groups based on the frameworks or guidelines expressed at the forefront of their principal investment str

198、ategies sections.Broad ESG focus:These funds focus broadly on ESG matters.They consider all three elements of ESG(rather than focusing on one or two of the considerations)or may include ESG in their names.Index funds in this group may track a socially responsible index such as the MSCI KLD 400 Socia

199、l Index.Environmental focus:These funds focus more narrowly on environmental matters.They may include terms such as alternative energy,climate change,clean energy,environmental solutions,or low carbon in their principal investment strategies or fund names.Religious values focus:These funds invest in

200、 accordance with specific religious values.Other focus:These funds focus more narrowly on some combination of environmental,social,and/or governance elements,but not all three.They often negatively screen to eliminate certain types of investments.FIGURE2.12Number of Funds That Invest According to ES

201、G Criteria Is Steadily RisingBy focus,year-end2022220222489583$276$393740329108169134$88$12$104$72$145$32$119$95$550$42$150$144$213881$460$41$127$92$200430131187133Other focusReligious values focusEnvironmental focusBroad ESG focusTotal net assetsBillions

202、of dollarsNumber of fundsNote:Data include mutual funds and ETFs.Data include mutual funds that invest primarily in other mutual funds and ETFs that invest primarily in other ETFs.ESG Resource Centerwww.ici.org/esg3CHAPTER2023 INVESTMENT COMPANY FACT BOOK34US Mutual FundsA mutual fund is an investme

203、nt company that pools money from shareholders and invests in a portfolio of securities.In 2022,115.3 million individual investors in 68.6 million US households owned mutual funds,relying on them to meet long-term personal financial objectives,such as preparing for retirement,education,or a home purc

204、hase.US households and institutions also use money market funds as cash management tools.Mutual funds had net outflows of$1.1 trillion in 2022,or 4.2 percent of year-end 2021 total net assets.Changing demographics,portfolio rebalancing,and investors reactions to US and worldwide economic and financi

205、al conditions play important roles in determining how demand for specific types of mutual fundsand for mutual funds in generalevolves.IN THIS CHAPTER35 Overview of Mutual Fund Trends38 Developments in Mutual Fund Flows40 Equity Mutual Funds42 Bond Mutual Funds46 Hybrid Mutual Funds47 Growth of Other

206、 Investment Products50 Money Market Funds35US MUTUAL FUNDSOverview of Mutual Fund TrendsWith$22.1 trillion in total net assets,the US mutual fund industry remained the largest in the world at year-end 2022.The majority of US mutual fund net assets at year-end 2022 were in long-term mutual funds,with

207、 equity funds alone making up 51 percent of US mutual fund net assets.Money market funds were the second-largest category,with 22 percent of net assets.Bond funds(20percent)and hybrid funds(7 percent)held the remainder.Investor Demand for US Mutual FundsA variety of factors influence investor demand

208、 for mutual funds,such as funds ability to assist investors in achieving their investment objectives.For example,US households rely on equity,bond,and hybrid mutual funds to meet long-term personal financial objectives,such as preparing for retirement,saving for emergencies,or saving for education.U

209、S households,as well as businesses and other institutional investors,use money market funds as cash management tools because they provide a high degree of liquidity and competitive short-term yields.Investor demand for mutual funds decreased sharply in 2022driven by outflows from long-term mutual fu

210、nds.Equity mutual funds experienced significant outflows in 2022,reflecting the sharp decline in equity markets and an ongoing shift to other products.In addition,demand for bond mutual funds weakened considerably in 2022,as the Federal Reserve raised interest rates at the fastest pace in four decad

211、es to combat rising inflation,which led to significant losses in bond markets.Demand for money market funds steadily shifted from outflows to inflows as investorsparticularly retail investorswere attracted to rising short-term yields.2023 INVESTMENT COMPANY FACT BOOK36Entry and Exit of US Mutual Fun

212、dsMutual fund sponsors create new funds to meet investor demand,and they merge or liquidate those that do not attract sufficient investor interest.A total of 277 mutual funds opened in 2022(Figure 3.1).The number of new mutual funds offered in 2022 was relatively even with 2021,as an increase in the

213、 number of equity fund launches offset a decrease in the number of hybrid and taxable bond fund launches.During the same time,the number of mutual funds that were either merged or liquidated decreased 16 percent to 335 funds,as sponsors eliminated fewer equity mutual funds from their lineups.FIGURE3

214、.1Mutual Funds Enter and Exit the Industry Because of Competition and Investor Demand20200969434288235236248245360466907340652Opened mutual fundsMerged mutual fundsLiqu

215、idated mutual funds242179Note:Data include mutual funds that do not report statistical information to the Investment Company Institute and mutual funds that invest primarily in other mutual funds.37US MUTUAL FUNDSFIGURE3.2Households Held 88 Percent of Mutual Fund Total Net AssetsTrillions of dollars

216、,year-end 2022Mutual fund total net assets:$22.1 trillionLong-term mutual fund total net assets:$17.3 trillionMoney market fund total net assets:$4.8 trillion$1.7Institutional investorsmoney market funds$3.0Households moneymarket funds*$16.3Households long-termmutual funds*$1.0Institutional investor

217、slong-term mutual funds*Mutual funds held as investments in individual retirement accounts,defined contribution retirement plans,variable annuities,529 plans,and Coverdell education savings accounts are counted as household holdings of mutual funds.Investors in US Mutual FundsDemand for mutual funds

218、 is,in part,related to the types of investors who hold mutual fund shares.Retail investors(i.e.,households)held the vast majority(88 percent)of the$22.1 trillion in US mutual fund net assets at year-end 2022(Figure 3.2).The proportion of long-term mutual fund net assets held by retail investors is e

219、ven higher(94 percent).Retail investors also held substantial money market fund net assets($3.0 trillion),but this was a relatively small share(16 percent)of their total mutual fund net assets($19.4 trillion).In contrast,institutional investors,such as nonfinancial businesses,financial institutions,

220、and nonprofit organizations,held a relatively small portion of mutual fund net assets.At year-end 2022,institutions held 12 percent of mutual fund net assets(Figure 3.2).The majority(64 percent)of the$2.7 trillion that institutions held in mutual funds was in money market funds,because one of the pr

221、imary reasons institutions use mutual funds is to help manage their cash balances.2023 INVESTMENT COMPANY FACT BOOK38Developments in Mutual Fund FlowsOverall demand for mutual funds as measured by net new cash flownew fund sales less redemptions,plus net exchangesweakened considerably in 2022(Figure

222、 3.3).In 2022,mutual funds had net outflows of$1.1 trillion(4.2 percent of year-end 2021 total net assets),following net inflows of$358 billion in 2021.Long-term mutual funds experienced net outflows of$1.1 trillion in 2022,while money market funds saw net outflows of$4 billion.A number of factorsin

223、cluding broad-based declines in financial markets,a rising interest rate environment,ongoing demographic trends,and demand for indexed productsappeared to influence US mutual fund flows in 2022.The US Economy and Financial Markets in 2022The year proved to be a challenging one for the US economy and

224、 financial markets.After expanding at a brisk 5.9 percent pace in 2021,real GDP grew more slowly(2.1 percent)in 2022,as the economy struggled with persistent inflationary pressures throughout the year.In response to stubbornly high inflation,the Federal Reserve increased the federal funds rate at a

225、rapid pace in 2022raising it by 25 basis points in March,followed by hikes of 50 to 75 basis points at each of the six remaining Federal Open Market Committee(FOMC)meetings to end the year at a target range of 4.25 to 4.50 percent.FIGURE3.3Net Outflows from Mutual Funds Were Primarily from LongTerm

226、Funds in 2022Billions of dollars,annual-1,2020022-800Total net new cash flowEquity,bond,and hybrid mutual fundsMoney market funds178106-98-58-1,121LEARN MORE39US MUTUAL FUNDSThe swift increase in short-term rates caused the Treasury yie

227、ld curvewhich illustrates the difference between the yields on long-term Treasuries and short-term Treasury billsto flatten considerably during the year.By year-end,the yield curve had inverted,which is typically considered an indicator of a looming recession by market participants.Capital markets e

228、xperienced significant volatility and losses during 2022,as the economic outlook deteriorated amid persistently high inflation,aggressive monetary policy tightening,and the effects of Russias invasion of Ukraine,among other factors.Stock markets in the United States ended 2022 close to bear market t

229、erritory,falling 19 percent.*Additionally,rising labor costs,higher interest rates,and slowing sales growth eroded profits of corporations,while the strengthening of the US dollaran offshoot of the Federal Reserves interest rate hikesfurther devalued the overseas earnings of US corporations.During 2

230、022,the VIX averaged 25.6 and surpassed 30a level generally considered to signal heightened volatility from increased uncertainty,risk,and investor fearon 19 percent of trading days.Bond markets also experienced significant losses during this period.Rising interest rates deteriorated bond valuations

231、 and resulted in substantial losses of 12percent in 2022 even after including interest income.LongTerm Mutual Fund FlowsAlthough net new cash flows into long-term mutual funds are typically correlated with market returns,they tend to be moderate as a percentage of total net assets even during episod

232、es of market turmoil.Several factors may contribute to this phenomenon.For example,households(i.e.,retail investors)own the vast majority of US long-term mutual fund net assets(Figure 3.2).Retail investors generally respond less strongly to market events than institutional investors do.Most notably,

233、households often use mutual funds to save for the long term,such as for retirement or college.Many of these investors make stable contributions through periodic payroll deductions,even during periods of market stress.In addition,many mutual fund shareholders seek the advice of financial advisers,who

234、 may provide a steadying influence during market downturns.These factors are amplified by the fact that net assets in mutual funds are spread across 115 million individual investors who have a wide variety of individual characteristics(such as age or appetite for risk)and goals(such as saving for re

235、tirement,emergencies,or education).Investors are also bound to have a wide range of views on market conditions and how best to respond to those conditions to meet their individual goals.As a result,even during months when funds as a whole experience net outflows,many investors continue to purchase f

236、und shares.*As measured by the Wilshire 5000 Total Market Index.The Chicago Board Options Exchange(CBOE)Volatility Index(VIX)is a widely used measure of expected stock market volatility.As measured by the S&P US Aggregate Bond Index.Even in Bear Markets,Equity Fund Investors Stay the Coursewww.ici.o

237、rg/viewpoints/view_18_equity_flowsLEARN MORE2023 INVESTMENT COMPANY FACT BOOK40Equity Mutual FundsFollowing the decline in stock market performance around the globe,equity mutual funds experienced net outflows totaling$472 billion in 2022(3.2 percent of year-end 2021 total net assets).Equity mutual

238、funds had net outflows in every month in 2022(Figure 3.4).In the first three months of the year,investors had redeemed,on net,a modest$46 billion from equity mutual funds.Flows to mutual funds,in general,tend to be bolstered in the first quarter of the year because investors who receive year-end bon

239、uses may invest that money relatively quickly in the new year.In addition,some investors wait to make contributions to their individual retirement accounts(IRAs)before filing their tax returns.As the year progressed,net outflows from equity mutual funds accelerated,with investors redeeming,on net,$4

240、25 billion from April through December.FIGURE3.4Equity Mutual Funds Had Net Outflows in 2022Billions of dollars;monthly,2022-100-80-60-40-20020DecNovOctSepAugJulJunMayAprMarFebJan-8-17-36-33-42-41-41Total net new cash flowDomestic equity mutual fundsWorld equity mutual funds-20-52-21-66-95Note:In Ma

241、rch 2022,world equity mutual funds had net inflows of less than$500 million.From December Outflows to January Inflows:Seasonal Factors in Mutual Fund Flowswww.ici.org/viewpoints/view_19_seasonal_nncf41US MUTUAL FUNDSIn addition to declining stock prices,net outflows from domestic equity mutual funds

242、 in 2022 may have also been driven by investor demand for domestic equity exchange-traded funds(ETFs).As discussed in chapter 4,demand for ETFs has been very strong over the past several years.Except for April,domestic equity ETFs had net creations in every month of 2022,which resulted in$317billion

243、 in net share issuance over the year(see Figure 4.4).In contrast,domestic equity mutual funds had net outflows of$316 billion in 2022(Figure 3.4).Demand for world equity mutual funds weakened considerably in 2022,with investors redeeming$156 billion(Figure 3.4),compared with net redemptions of$16 bi

244、llion in 2021.Outflows were broad-based across emerging market equity,global equity,international equity,and regional equity funds.2023 INVESTMENT COMPANY FACT BOOK42FIGURE3.5Net New Cash Flow to Bond Mutual Funds Is Typically Related to Bond ReturnsMonthly220609121518213.02.52.01.51.00.50.0-0.5-1.0

245、-1.5-2.0302520151050-5-10-15-20031 Net new cash flow is reported as a percentage of previous month-end bond mutual fund total net assets,plotted as a three-month moving average.Data exclude high-yield bond mutual funds.2 The total return on bonds is measured as the year-over-year percent change in t

246、he FTSE US Broad Investment Grade Bond Index.Sources:Investment Company Institute,FTSE Russell,and RefinitivBond Mutual FundsBond mutual fund net new cash flows typically are correlated with the performance of US bonds(Figure 3.5),which,in turn,is largely driven by the US interest rate environment.L

247、ong-term interest rates increased considerably in 2022,reflecting the aggressive tightening of monetary policy by the Federal Reserve to tame inflation.The yield on the 10-year Treasury started 2022 at 1.52percent and increased to 4.25 percent in October before falling to 3.88 percent by year-end.Th

248、e sharp increase in interest rates resulted in significant capital losses on US bonds in 2022.43US MUTUAL FUNDSFIGURE3.6Net New Cash Flow to Bond Mutual FundsBillions of dollars;monthly,2022DecNovOctSepAugJulJunMayAprMarFebJan50250-25-50-75-100Total net new cash flowTaxable bond mutual fundsMunicipa

249、l bond mutual funds-14-34-45-56-86-63-34-57-59-35-8-53Note:In July 2022,municipal bond mutual funds had net inflows of less than$500 million.Taxable bond mutual funds experienced net outflows in each month of 2022 totaling$393 billion,or 8.5 percent of their year-end 2021 total net assets(Figure 3.6

250、).Portfolio rebalancing may have also contributed to these outflows.With stocks underperforming bonds in 2022,investors and target date funds following asset allocation strategies would have needed to sell bond funds and buy equity funds to remain at their target allocations.Investor demand weakened

251、 across all categories of taxable bond mutual funds in 2022,with investment grade bond funds experiencing the bulk of outflows($198 billion),which represented 7.5 percent of their year-end 2021 total net assets.Multi-sector bond mutual funds saw outflows of$67 billion(or 10.8 percent of their net as

252、sets at year-end 2021);world bond mutual funds,which typically hold a mix of bonds denominated in US dollars and foreign currencies,saw net outflows of$50 billion(8.6 percent);high-yield bond funds saw net outflows of$46 billion(11.7 percent);and government bond mutual funds saw net outflows of$33 b

253、illion(8.0 percent).Demand for municipal bond mutual funds also weakened in 2022,with net outflows in nearly every month totaling$148 billion for the year,or 15.2 percent of their year-end 2021 net assets.2023 INVESTMENT COMPANY FACT BOOK44How Bond Mutual Funds Manage Investor FlowsWhen meeting rede

254、mptions,fund managers actions are guided by market conditions,expected investor flows,and other factors.A fund might decide to sell some of its holdings to raise the cash needed to fulfill redemptions.But its choice of which particular securities to sell may depend on market conditions.For example,d

255、uring a market downturn,with liquidity at a premium,some fund managers might seek to add shareholder value by selling some of their funds more liquid bonds(which,being in high demand,are trading at a premium to fundamental value).Other fund managers may conclude that it is necessary and appropriate

256、to sell a representative“slice”of their funds entire portfolios.Bond mutual fund managers have other ways of meeting redemption requests.For example,a fund might already have cash on hand.Or,the fund may use the cash that bond mutual funds receive each day in the form of interest income from bonds h

257、eld in the portfolio,proceeds from matured bonds,or new sales of fund shares.In addition,bond funds often use derivatives or hold liquid assets other than cash.For example,a high-yield bond fund might hold some portion of its assets in equities,because equities are very liquid,and the return profile

258、s of high-yield bonds and equities can be similar.Derivatives can be more liquid than their physical counterparts,and funds are required to segregate liquid assets to support their derivatives positions.As these positions are closed,this cash collateral provides a ready source of liquidity to meet r

259、edemptions.This is especially true for many of the funds commonly called liquid alternative funds,as these funds are explicitly designed to allow frequent investor trading and do so in large measure through the use of derivatives.Long-Term Demand for Bond Mutual FundsDespite outflows in 2022,bond mu

260、tual funds have received$1.7 trillion in net new cash flow and reinvested dividends in the past decade(Figure 3.7).A number of factors have helped contribute to this long-term demand for bond mutual funds,including demographics.Older investors tend to have larger account balances because they have h

261、ad more time to accumulate savings and take advantage of compounding.At the same time,as investors age,they tend to shift toward fixed-income products.Over the past decade,the aging US population has boosted flows to bond funds.45US MUTUAL FUNDSThe popularity of target date mutual funds has also con

262、tributed to strong demand for bond mutual funds during this period.Target date funds invest in a changing mix of equities and fixed-income investments.As the fund approaches and passes its target date(which is usually specified in the funds name),the fund gradually reallocates assets from equities t

263、o fixed-income investments,including bonds.Over the past 10 years,target date mutual funds have received net inflows of$405billion.At year-end 2022,target date mutual funds had total net assets of$1.5 trillion.Investor interest in these funds likely reflects their automatic rebalancing features,as w

264、ell as their inclusion as an investment option in many defined contribution(DC)plans(see Figure 8.10).These long-term factors,combined with mostly positive annual returns on bonds and inflows from portfolio allocation strategies,have caused bond mutual fund total net assets to increase from$3.4trill

265、ion at year-end 2012 to$4.5 trillion at year-end 2022.However,long-term mutual funds share of bond marketsmost of which is held by bond mutual fundshas stayed relatively stable in recent years(see Figure 2.4).FIGURE3.7Bond Mutual Funds Have Experienced Net Inflows Through Most of the Past DecadeCumu

266、lative flows to bond mutual funds,billions of dollars,monthly05001,0001,5002,0002,500202220201520142013Note:Bond mutual fund data include net new cash flow and reinvested dividends.2023 INVESTMENT COMPANY FACT BOOK46FIGURE3.8Net New Cash Flow to Hybrid Mutual FundsBillions of d

267、ollars,annual2020022-91-49-28-42-193075-103-19-87Hybrid Mutual FundsHybrid funds(also called asset allocation funds or balanced funds)invest in a mix of stocks and bonds.This approach offers a way to balance the potential capital appreciation of stocks with the incom

268、e and relative stability of bonds over the long term.The funds portfolio may be periodically rebalanced to bring its asset allocation more in line with prospectus objectives,which could be necessary following capital gains or losses in the stock or bond markets.Over the past eight years,investors ha

269、ve moved away from hybrid mutual funds,which had been a popular way to achieve a managed,balanced portfolio of stocks and bonds(Figure 3.8).In 2022,hybrid mutual funds had net outflows of$103 billion(or 5.7 percent of their net assets at year-end 2021).Many factors have likely contributed to this ch

270、ange.For example,investors may be shifting out of hybrid funds and into portfolios of ETFs that are periodically rebalanced,often with the assistance of a fee-based financial adviser.In addition,investors may be shifting assets toward target date funds as an alternative way to achieve a balanced por

271、tfolio.*ICI generally excludes funds of funds from total net asset and net new cash flow calculations to avoid double counting.Although target date funds are classified as hybrid funds by ICI,97 percent of target date fund assets are in funds of funds,and therefore,their flows are excluded from the

272、hybrid mutual fund flows presented in Figure 3.8.47US MUTUAL FUNDSGrowth of Other Investment ProductsOutflows from some long-term mutual funds over the past decade reflect a broader shift,driven by both investors and retirement plan sponsors,toward other pooled investment vehicles.This trend is refl

273、ected in the outflows from actively managed mutual funds and the growth of index mutual funds,ETFs,and collective investment trusts(CITs)since 2007.Index mutual fundswhich hold all(or a representative sample)of the securities in a specified indexare popular among investors.Of households that owned m

274、utual funds,48 percent owned at least one index equity mutual fund in 2022.As of year-end 2022,517 index mutual funds managed total net assets of$4.8 trillion.For 2022 as a whole,investors added$37 billion in net new cash flow to these funds(Figure 3.9).Outflows from index world equity mutual funds(

275、$3 billion)were more than offset by inflows into index domestic equity mutual funds and index bond and hybrid mutual funds($36 billion and$5 billion,respectively).FIGURE3.9Net New Cash Flow to Index Mutual FundsBillions of dollars,annual202220201520142013-200-150-

276、0200250116157Total net new cash flowIndex bond mutual funds and index hybrid mutual fundsIndex world equity mutual fundsIndex domestic equity mutual funds150167199 INVESTMENT COMPANY FACT BOOK48Index domestic equity mutual funds and ETFs have particularly benefited from the overall

277、increased investor demand for index-based investment products.From 2013 through 2022,index domestic equity mutual funds and ETFs received$2.5 trillion in net new cash and reinvested dividends,while actively managed domestic equity mutual funds experienced net outflows of$2.3 trillion(including reinv

278、ested dividends)(Figure 3.10).Index domestic equity ETFs have grown particularly quicklyattracting nearly three times the amount of net inflows of index domestic equity mutual funds since 2013.Part of the recent increasing popularity of ETFs is likely attributable to more brokers and financial advis

279、ers using them in their clients portfolios.In 2021,full-service brokers and fee-based advisers had 28 percent and 41 percent,respectively,of their clients household assets invested in ETFs,up sharply from 6 percent and 10 percent in 2011(Figure 3.11).FIGURE3.10Some of the Outflows from Domestic Equi

280、ty Mutual Funds Have Gone to ETFsCumulative flows to domestic equity mutual funds and net share issuance of index domestic equity ETFs,billions of dollars,monthly-2,500-2,000-1,500-1,,0001,5002,0002,500202220201520142013Actively managed domestic equity mutual fundsI

281、ndex domestic equity ETFsIndex domestic equity mutual fundsNote:Mutual fund data include net new cash flow and reinvested dividends;ETF data for net share issuance include reinvested dividends.49US MUTUAL FUNDSCITs are an alternative to mutual funds for DC plans.Like mutual funds,CITs pool the asset

282、s of investors and(either actively or passively)invest those assets according to a particular strategy.Much like institutional share classes of mutual funds,CITs generally require substantial minimum investment thresholds,which can limit the costs of managing pooled investment products.Unlike mutual

283、 funds,which are regulated under the Investment Company Act of 1940,CITs are regulated under banking laws and not marketed as widely as mutual funds;this can also reduce their operational and compliance costs as compared with mutual funds.More retirement plan sponsors have begun offering CITs as opt

284、ions in 401(k)plan lineups.As Figure 3.12 demonstrates,this trend has translated into a growing share of assets held in CITs by large 401(k)plans.That share increased from 6 percent in 2000 to an estimated 30 percent in 2021.This recent expansion is due,in part,to the growth in target date CITs.FIGU

285、RE3.11FeeBased Advisers Are Investing Larger Portions of Client Portfolios in ETFsPercentage of household assets invested in investment category by adviser typeETFsVariable annuitiesMutual fundsETFsVariable annuitiesMutual funds20112021Full-service brokers1Fee-based advisers2,362569287531

286、 This category includes wirehouses as well as regional,independent,and bank broker-dealers.2 This category includes registered investment advisers and dually registered investment adviser broker-dealers.3 This category excludes an unknown portion of assets from investors who received fee-based advic

287、e but implemented trades themselves through discount brokers and fund supermarkets.Source:Cerulli Associates,“The State of US Retail and Institutional Asset Management,2022”FIGURE3.12Assets of Large 401(k)Plans Are Increasingly Held in Collective Investment TrustsPercentage of assets in large 401(k)

288、plans*2020200005200020296262830*Large 401(k)plans are those that filed Form 5500 Schedule H(typically plans with 100 participants or more).Note:Assets exclude Direct Filing Entity assets that are reinvested in collective investment trusts.Data prior to 2021 come from

289、 the Form 5500 Research data sets released by the Department of Labor.Data for 2021 are preliminary,based on Department of Labor Form 5500 latest data sets.Source:Investment Company Institute calculations of Department of Labor Form 5500 data2023 INVESTMENT COMPANY FACT BOOK50Money Market FundsIn 20

290、22,money market funds saw net outflows of$4 billion(Figure 3.13).Prime money market funds and tax-exempt money market funds received inflows($224 billion and$25 billion,respectively),but these flows were offset by outflows from government money market funds($253 billion).Most of the demand for money

291、 market funds in 2022 was from retail investors.Retail money market funds had net inflows of$254 billion while institutional money market funds had net outflows of$258billion(Figure 3.14).In 2022,short-term interest rates ramped up quickly amid aggressive monetary tightening and by year-end were hig

292、her than longer dated fixed-income securities.Retail investors were particularly attracted to rising yields and extremely low interest rate risk offered by money market funds,especially in light of significant capital losses in stock and bond markets.To mitigate these losses,retail investors may hav

293、e shifted some of their bond fund positions into money market funds to shorten the duration of their fixed-income investments.FIGURE3.13Net New Cash Flow to Money Market FundsBillions of dollars;monthly,2022DecNovOctSepAugJulJunMayAprMarFebJan-50-Total net new cash flowGovernment money

294、market fundsTax-exempt money market fundsPrime money market funds-136-3810-68-83431-10-231569651US MUTUAL FUNDSIn contrast,institutional investors,on net,redeemed cash from money market fundsa development that is consistent with previous monetary policy tightening cycles.Because of their size and in

295、vestment knowledge,some institutional investors can easily invest directly in short-term instruments.This allows those institutional investors to capture higher yields immediately when the Federal Reserve raises the federal funds raterather than waiting for yields on money market funds to catch up a

296、s older,lower-yielding short-term securities mature and are replaced with newer,higher-yielding paper.FIGURE 3.14Inflows into Retail Money Market Funds Mostly Offset Outflows from Institutional Money Market FundsBillions of dollars,2022RetailInstitutional254-2584CHAPTER2023 INVESTMENT COMPANY FACT B

297、OOK52US Exchange-Traded FundsETFs are a convenient,cost-effective tool for investors seeking to gain or shed exposure to broad markets,particular sectors or geographical regions,or specific investment strategies.Demand for ETFs has grown markedly as investorsboth institutional and retailincreasingly

298、 turn to them as investment options.In the past 10 years,net share issuance of ETFs has totaled$4.1 trillion.As investor demand has increased,sponsors have offered more ETFs with a greater variety of investment objectives.With$6.5trillion in total net assets at year-end 2022,the US ETF industry rema

299、ined the largest in the world.IN THIS CHAPTER53 What Is an ETF?54 ETF Total Net Assets57 Demand for ETFs60 Characteristics of ETF-Owning Households53US EXCHANGE-TRADED FUNDSWhat Is an ETF?An exchange-traded fund(ETF)is a pooled investment vehicle with shares that investors can buy and sell throughou

300、t the day on a stock exchange at a market-determined price.Investors may buy or sell ETF shares through a broker or in a brokerage account,just as they would the shares of any publicly traded company.ETFs have been available as an investment product for 30 years in the United States.Most ETFs are st

301、ructured as open-end investment companies,like mutual funds,and are governed by the same regulations.Other ETFsprimarily those investing in commodities,currencies,and futureshave different structures and are subject to different regulatory requirements.Learn More About ETFsETFs have proven to be a s

302、uccessful financial innovation among registered investment companies since the first one was created in 1993.The demand for ETFs has grown markedly as both institutional and retail investors have gravitated toward them because of their appealing features.For an introduction to the creation,operation

303、,and evolution of the regulation of ETFs,as well as information about authorized participants(or APs)and the key similarities and differences between ETFs and mutual funds,see the ETF Resource Center available at www.ici.org/etf.2023 INVESTMENT COMPANY FACT BOOK54ETF Total Net AssetsAt year-end 2022

304、,the US ETF marketwith 2,844 funds and$6.5 trillion in total net assetsremained the largest in the world,accounting for 72 percent of the$8.9 trillion in ETF net assets worldwide.*Within the United States,total net assets in ETFs accounted for 22 percent of assets managed by investment companies at

305、year-end 2022(see Figure 2.1).ETFs have been available for 30 years,and in that time,large-cap domestic equity ETFs have accounted for a substantial proportion of ETF net assets.At year-end 2022,net assets in large-cap domestic equity ETFs totaled$1.9 trillion,or 30 percent of ETF net assets.Bond ET

306、Fs,which have been fueled by strong investor demand over the past several years,accounted for$1.3 trillion(19 percent)of net assets.*Based on ICI calculations of data from the International Investment Funds Association(IIFA).FIGURE4.1Total Net Assets and Number of ETFsBillions of dollars,year-end202

307、2202,Large-cap domestic equityOther domestic equityGlobal/International equity BondHybrid and commodity*Number of ETFs204809231,5972,2032,5702,8445,4497,1916,477*Commodity ETFs include fundsboth registered and not registered under the Investment Company Act of 1940th

308、at invest primarily in commodities,currencies,and futures.Note:The first bond,hybrid,and commodity ETFs were opened in 2002,2007,and 2004,respectively.55US EXCHANGE-TRADED FUNDSSecondary Market Trading in ETF SharesMany investors access ETFs through the secondary market(e.g.,on an exchange).Although

309、 many large institutional investors can access ETFs in both the primary market(i.e.,through creations and redemptions of ETF shares via an AP)and the secondary market,retail investors generally can access them only in the secondary market.ETF investors trading in the secondary market generally are n

310、ot motivated by arbitrage.They are using ETFs to gain or reduce exposure to specific asset classes or investment strategies,diversify their portfolios,or hedge investment risks.Thus,these funds provide investors with an efficient means to transfer risk.Therefore,it is not surprising that ETF seconda

311、ry market trading volumes(as measured by the value of shares traded)are a substantial share of total trading on US stock exchanges and other venues.But despite tremendous growth in ETFs in the past decade,their average daily share of total stock market trading has remained relatively flatfluctuating

312、 in a narrow range.In 2022,ETFs share of trading volume somewhat increased and accounted for 30 percent of average daily total stock market trading(Figure 4.2),which was likely related to elevated market volatility.During periods of market turbulence,ETF secondary market trading volumes riseboth in

313、absolute terms and as a share of total stock market tradingas investors,especially institutional investors,turn to ETFs to quickly and efficiently transfer and hedge risks.For example,in late 2018,stock market volatility jumped,largely reflecting market participants concerns about slowing global gro

314、wth and intensifying trade tensions.On December 24,2018,when the S&P 500 index neared bear market territory following its September peak,ETF trading volume accounted for 43 percent of total stock market tradingits highest share in the past decade(Figure 4.2).More recently,in 2022,there was an abunda

315、nce of concern over the increased volatility in equity and bond markets and the Federal Reserves stance on monetary policy to combat rising inflationwith year-over-year inflation reaching a 40-year high in June.As such,ETF trading volume peaked at 39 percent of total stock market trading on June 13,

316、2022,one day before the Federal Reserves June Federal Open Market Committee(FOMC)meeting.2023 INVESTMENT COMPANY FACT BOOK56Across all ETFs,most activity is conducted in the secondary market(trading ETF shares)rather than the primary market(creations and redemptions of ETF shares through an AP).On a

317、verage,86 percent of the total activity in ETFs occurred on the secondary market in 2022.Even for ETFs focused on narrower asset classessuch as emerging market equity,domestic high-yield bond,and emerging market bondthe bulk of the trading occurred on the secondary market(95 percent,81percent,and 88

318、 percent,respectively).*Most ETF secondary market trades represent investors exchanging shares of ETFs among themselves.Unlike primary market activity,these trades do not affect the ETFs underlying securities.In 2022,domestic equity ETFs had a total of$5.2 trillion in primary market activity,which r

319、epresented only 5.2 percent of the$99.8 trillion traded in company stocks during the year(Figure 4.3).Even in years with significant market volatility,such as 2018,2020,and 2022,creations and redemptions of domestic equity ETFs accounted for only a modest share of trading in company stocks.*Based on

320、 ICI calculations of data from Refinitiv.FIGURE4.2ETF Secondary Market Trading Averaged 30 Percent of Daily US Stock Trading in 2022Percentage of total US stock market trading volume,annual002220206403643353638384025262727252726252661620171418Da

321、te of maximumJun 13Jun 20Nov 26Feb 3Aug 24Dec 1Sep 13Dec 24Jan 2Mar 3Date of minimumJun 25Dec 16Feb 12Jun 27Jun 26Jun 23Jul 28Jun 22Nov 26Dec 18Maximum daily ETF share for the yearAverage daily ETF share of total US stock market tradingMinimum daily ETF share for the year30Sources:Investment Company

322、 Institute,Bloomberg,Refinitiv,and Cboe Exchange,Inc.57US EXCHANGE-TRADED FUNDSFIGURE 4.3Domestic Equity ETFs Have Had Minimal Impact on Underlying US StocksAnnualDomestic equity ETF primary market activity*Trillions of dollarsValue of company stock tradedTrillions of dollarsDomestic equity ETF prim

323、ary market activity as a share of company stock tradedPercent 2013$1.9$41.24.6%20142.348.74.620152.551.34.920162.249.74.420172.251.34.220183.565.15.420192.959.45.020204.288.94.720214.9106.34.620225.299.85.2*Primary market activity is measured as the total of gross issuance and gross redemptions.Sour

324、ces:Investment Company Institute,Bloomberg,Refinitiv,and Cboe Exchange,Inc.Demand for ETFsIn recent years,demand for ETFs has grown as institutional investors have found ETFs to be a convenient vehicle for participating in,or hedging against,broad movements in the stock market,and financial advisers

325、 are investing more of their retail clients assets in ETFs(see Figure 3.11).Although down from 2021s record high,net issuance of ETF shares(including reinvested dividends)in 2022 was a robust$609 billion,even with steep losses in stock and bond markets(Figure 4.4).Net issuance of domestic equity ETF

326、s was$317 billion in 2022,down from$519 billion in 2021,and net issuance of global/international equity ETFs fell from$211 billion to$100 billion.The drop-off in demand for these two categories likely reflected the poor performance of worldwide stock pricesUS stocks were down 19 percent*and internat

327、ional stocks lost 16 percent.Demand for global/international equity ETFs was also likely tamped down by an appreciation in the value of the US dollar,which generally decreases the attractiveness of international investments to US investors.Despite losses of 12 percent(including interest income)on US

328、 bonds,demand for bond ETFs remained fairly steady,with net issuance totaling$197 billion in 2022 versus$203 billion in 2021.In 2022,net issuance of bond ETFs was more concentrated in low duration fundsan estimated 42percent of the bond ETF net issuance went to funds with durations of two years or l

329、ess.*As measured by the Wilshire 5000 Total Market Index.As measured by the MSCI ACWI Ex USA Index(expressed in US dollars).As measured by the S&P US Aggregate Bond Index.Based on ICI calculations of data from Morningstar Direct.2023 INVESTMENT COMPANY FACT BOOK58FIGURE4.4Net Share Issuance of ETFs

330、Declined in 2022Billions of dollars,annual20222021820175.1All ETFsLarge-cap domestic equityOther domestic equityGlobal/International equity BondHybrid and commodity*93560950006007008009001,000*Commodity ETFs include fundsboth registered and not registered under

331、 the Investment Company Act of 1940that invest primarily in commodities,currencies,and futures.Note:Data for net share issuance include reinvested dividends.59US EXCHANGE-TRADED FUNDSOverall demand for ETFs in 2022 may have also been boosted due to tax loss harvestinga strategy that allows investors

332、 to offset capital gains with capital losses to reduce or minimize their tax liability.Because tax loss harvesting involves selling a security at a loss,some investors tend to replace the security that was sold with a similar one to maintain the portfolios allocation structure and its associated ris

333、k profile.These transactions,however,must comply with the wash-sale rule,which disallows claimed losses on the sale of a security if that same security or a substantially identical one is bought within 30 days.As a result,some investors may have chosen to buy ETFs with similar but not substantially identical investment exposure to replace the securities they sold to avoid violating the wash-sale r