This section describes recent U.S. mutual fund developments and examines the market factors that affect the demand for stock, bond, hybrid, and money market funds.

Demand for Long-Term Mutual Funds

Stock Funds

Bond and Hybrid Funds

Index Funds

Demand for Money Market Funds

Retail Money Market Funds

Institutional Money Market Funds

With $9.6 trillion in assets, the U.S. mutual fund industry remained the largest in the world at year-end 2008. Nevertheless, total net assets fell $2.4 trillion from year-end 2007’s level, largely reflecting the sharp drop in equity prices experienced worldwide in 2008. Investor demand for mutual funds slowed in 2008 with net new cash flow to all types of mutual funds amounting to $411 billion, less than half the pace seen in 2007. Investor demand for certain types of mutual funds appeared to be driven in large part by deteriorating financial market conditions, especially in the second half of 2008. Stock mutual funds suffered substantial outflows, while inflows to U.S. government money market funds reached a record high.

U.S. Mutual Fund Assets

The U.S. mutual fund market, with $9.6 trillion in assets under management as of year-end 2008, remained the largest in the world, accounting for 51 percent of the $19.0 trillion in mutual fund assets worldwide (Figure 2.1).

Investor demand for mutual funds is influenced by a variety of factors, not least of which is funds’ ability to assist investors in achieving a wide variety of investment objectives. In particular, U.S. households’ reliance on stock, bond, and hybrid mutual funds reflects investor desire to meet long-term personal financial objectives such as preparing for retirement. Furthermore, U.S. households, 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.

FIGURE 2.1

U.S. HAD THE WORLD’S LARGEST MUTUAL FUND MARKET

Percentage of total net assets, year-end 2008

Figure 2.1

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Sources: Investment Company Institute, European Fund and Asset Management Association, and other national mutual fund associations

Investors’ reactions to U.S. and worldwide economic and financial conditions—from year to year and over longer periods—also play an important role in determining demand for specific types of mutual funds and for mutual funds in general.

Money market funds accounted for 40 percent of U.S. mutual fund assets at year-end 2008 (Figure 2.1). Stock mutual funds made up 39 percent of U.S. mutual fund assets, the smallest share since 1994. In 2008, domestic stock funds—those that invest primarily in shares of U.S. corporations—held 30 percent of total industry assets; international stock funds—those that invest primarily in foreign corporations—accounted for another 9 percent. Bond funds (16 percent) and hybrid funds (5 percent) held the remainder of total U.S. mutual fund assets.

Approximately 600 sponsors managed mutual fund assets in the United States in 2008. Long-run competitive dynamics have prevented any single firm or group of firms from dominating the market. For example, of the largest 25 fund complexes in 1985, only 10 remained in this top group in 2008. Another measure is the Herfindahl-Hirschman index, which weighs both the number and relative size of firms in the industry to measure competition. Index numbers below 1,000 indicate that an industry is unconcentrated. The mutual fund industry has a Herfindahl-Hirschman index number of 433 as of December 2008.

In this past decade, however, the percentage of industry assets at larger fund complexes has increased. This is due in part to the acquisition of smaller fund complexes by larger ones. The share of assets managed by the largest 25 firms increased to 75 percent in 2008 from 68 percent in 2000 (Figure 2.2). In addition, the share of assets managed by the largest 10 firms in 2008 was 53 percent, up from the 44 percent share managed by the largest 10 firms in 2000. Nevertheless, the composition of fund complexes within these groups has changed significantly over the period of 2000 to 2008.

FIGURE 2.2

SHARE OF ASSETS AT LARGEST MUTUAL FUND COMPLEXES

Percentage of industry total net assets, year-end, selected years

	1985	1990	1995	2000	2005	2007	2008
Largest 5 complexes	37	34	34	32	37	38	38
Largest 10 complexes	54	53	47	44	48	50	53
Largest 10 complexes	78	75	70	68	70	71	75

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Strong inflows to money market funds, which are fewer in number and have fewer fund sponsors than long-term mutual funds, helped push several fund complexes that specialize in money market funds into the largest groups.

Developments in Mutual Fund Flows

Investor demand for mutual funds slowed substantially in 2008. Net new cash flow to all mutual funds—the dollar value of new fund sales minus redemptions, combined with net exchanges—was $411 billion, less than half the frenetic record pace set in 2007, but comparable to that of 2006 (Figure 2.3). Outflows from stock mutual funds and reduced inflows to taxable bond mutual funds accounted for much of the deceleration.

FIGURE 2.3

Net NEW CASH Flows to Mutual Funds

Billions of dollars, 1994–2008

Figure 2.3

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MUTUAL FUND ASSETS BY TAX STATUS

Mutual funds generally distribute all earnings—capital gains and ordinary dividends—each year to shareholders, and are taxed only on amounts retained. Fund investors are ultimately responsible for paying tax on a fund’s earnings, whether they receive the distributions in cash or reinvest them in additional fund shares. Investors often attempt to lessen the impact of taxes on their investments
by investing in tax-exempt funds and tax-deferred retirement accounts. As of year-end 2008, 9 percent of all mutual fund assets were held in tax-exempt funds, and 38 percent were invested in tax-deferred accounts held by households (Figure 2.4).

For more information on tax issues affecting mutual fund shareholders, visit the Institute’s website.

FIGURE 2.4

47 percent of Mutual Fund Assets WERE Held in Tax-Deferred Accounts and Tax-Exempt Funds

Percentage, year-end 2008

Section 2.4

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Note: Components do not add to 100 percent because of rounding.

MUTUAL FUND CAPITAL GAIN DISTRIBUTIONS

Capital gain distributions represent a fund’s net gains, if any, from the sale of securities held in its portfolio. When gains from these sales exceed losses, they are distributed to fund shareholders. Mutual funds distributed $133 billion in capital gains to shareholders in 2008 (Figure 2.5). Sixty-eight percent of these distributions were paid to tax-deferred household accounts, and another 26 percent were paid to taxable household accounts. Stock, bond, and hybrid funds can distribute capital gains, but stock funds typically account for the bulk of the distributions. In 2008, 30 percent of stock fund share classes made a capital gain distribution, and half of these share classes distributed at least 4 percent of their assets as capital gains.

FIGURE 2.5

Capital Gain Distributions*

Billions of dollars, 1998–2008

Figure 2.5

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*Capital gain distributions include long-term and short-term capital gains.
Note: Components may not add to the total because of rounding.

MUTUAL FUND DIVIDEND DISTRIBUTIONS

Dividend distributions represent income—primarily from the interest and dividends earned by the securities in a fund’s portfolio—after expenses are paid by the fund. Mutual funds distributed $275 billion in dividends to fund shareholders in 2008 (Figure 2.6). Mutual fund dividends declined in 2008 largely in response to the drop in short-term interest rates and a decrease in dividend payments by domestic corporations. Bond and money market funds accounted for 65 percent of all dividend distributions in 2008. Forty-seven percent of all dividend distributions were paid to tax-exempt fund shareholders and tax-deferred household accounts. Another 40 percent were paid to taxable household accounts.

FIGURE 2.6

Dividend Distributions

Billions of dollars, 1998–2008

Figure 2.6

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Note: Components may not add to the total because of rounding.

Disruptions in financial markets that began in August 2007 continued and intensified throughout 2008. The more dramatic effects of the crisis in 2008 include the failures of Lehman Brothers Holdings Inc., Washington Mutual, Inc., and a range of other financial institutions; the government-orchestrated rescues of The Bear Stearns Companies and American International Group, Inc.; the government takeovers of Fannie Mae and Freddie Mac; and the “breaking of the dollar” net asset value (NAV) of an institutional money market fund (Reserve Primary Fund) resulting from its holdings of defaulted Lehman Brothers commercial paper. These and other developments prompted the Federal Reserve to lower the target federal funds rate over the course of 2008 from 4.25 percent to a target range of 0 to 0.25 percent. Also, the U.S. Department of the Treasury and the Federal Reserve instituted several programs aimed at shoring up investor confidence and fostering liquidity in the money market.

Abroad, many countries experienced a more pronounced slowdown in economic growth than did the United States in 2008. In addition, most foreign stock markets, especially those in emerging markets, endured even larger losses than in the United States.

Demand for Long-Term Mutual Funds

Investors withdrew $226 billion, on net, from stock, bond, and hybrid funds in 2008 (Figure 2.7), the first such annual outflow in long-term mutual funds since 1988. Net outflows from load funds amounted to $146 billion with the bulk withdrawn from front-end-load and back-end-load shares. Back-end-load shares had net outflows for the eighth consecutive year. No-load share classes of stock, bond, and hybrid mutual funds also saw net outflows in 2008, but at a lower rate of $53 billion. Outflows from no-load share classes may have been tempered by mutual fund sales to investors in employer-sponsored retirement plans, which account for a large portion of no-load fund sales, and sales of funds of funds, which often invest in underlying no-load funds.

FIGURE 2.7

Net New Cash Flow to Long-Term Funds by Load Structure

Billions of dollars, 2002–2008

	2002	2003	2004	2005	2006	2007	2008
All long-term funds	$121	$216	$210	$192	$227	$223	-$226
Load	20	48	44	29	33	14	-146
Front-end load1	13	33	49	47	48	20	-98
Back-end load2	-18	-19	-38	-48	-48	-44	-39
Level load3	23	27	21	19	21	25	-12
Other load4	2	8	13	11	12	13	4
No-load5	102	126	130	145	170	185	-53
Retail	53	83	94	78	77	59	-102
Institutional	50	43	36	67	93	126	49
Variable annuities	-2	42	36	18	24	25	-27

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¹Front-end load > 1 percent. Primarily includes A shares; includes sales where front-end loads are waived.
²Front-end load = 0 percent and CDSL > 2 percent. Primarily includes B shares.
³Front-end load ≤ 1 percent, CDSL ≤ 2 percent, and 12b-1 > 0.25 percent. Primarily includes C shares; excludes institutional share classes.
⁴All other load share classes not classified as front-end load, back-end load, or level load. Primarily includes retirement share classes known as R shares.
⁵Front-end load = 0 percent, CDSL = 0 percent, and 12b-1 ≤ 0.25 percent.
Note: Components may not add to the total because of rounding.
Sources: Investment Company Institute; Lipper; ValueLine Publishing, Inc.; CDA/Wiesenberger Investment Companies Service; Data © CRSP University of Chicago, used with permission, all rights reserved (312.263.6400/www.crsp.com); and Strategic Insight Simfund

Mutual Fund Share Classes

Mutual funds are often classified according to the class of shares that fund sponsors offer to investors, primarily load or no-load classes. Load classes generally serve investors who own fund shares purchased through financial advisers; no-load fund classes usually serve investors who purchase shares without the assistance of a financial adviser or who choose to compensate the financial adviser separately. About two-thirds of all mutual funds offer two or more share classes. Funds that typically sell through financial advisers offer more than one share class to provide investors with several ways to pay for the services of financial advisers.

Load Share Classes

Load share classes—front-end-load, back-end-load, and level-load shares—usually include a sales load and/or a 12b-1 fee. The sales load and 12b-1 fees are used to compensate financial advisers and other investment professionals for their services.

Front-end-load shares, which are predominantly Class A shares, represent the traditional means of paying for securities-related assistance. Front-end-load shares generally charge a sales load at the time of the purchase, which is a percentage of the sales price or offering price. Front-end-load shares also often have a 12b-1 fee of about 0.25 percent. Front-end-load shares are sometimes used in employer-sponsored retirement plans, but fund sponsors typically waive the sales load for purchases made through such retirement plans.

Back-end-load shares, which are primarily Class B shares, typically do not have a front-end load. Investors using back-end-load shares pay for services provided by financial advisers through a combination of an annual 12b-1 fee and a contingent deferred sales load (CDSL). The CDSL is triggered if fund shares are redeemed before a given number of years of ownership. The CDSL decreases the longer the investor owns the shares and reaches zero typically after shares have been held six or seven years. After six to eight years, back-end-load shares usually convert to a share class with a lower 12b-1 fee. For example, Class B shares typically convert to Class A shares after a specified number of years.

Level-load shares, which include Class C shares, generally do not have a front-end load. Investors in this kind of share class compensate financial advisers with a combination of an annual 12b-1 fee (typically 1 percent) and a CDSL (also often 1 percent) that shareholders pay if they sell their shares within the first year after purchase.

No-Load Share Classes

No-load share classes have no front-end load or CDSL, and have a 12b-1 fee of 0.25 percent or less. Originally, no-load share classes were offered by mutual fund sponsors that sold directly to investors. Now, investors can purchase no-load funds through employer-sponsored retirement plans, mutual fund supermarkets, discount brokerage firms, and bank trust departments as well as directly from mutual fund sponsors. Some financial advisers who charge investors separately for their services rather than through a load or 12b-1 fee also use no-load share classes.

Stock Funds

Investors withdrew $234 billion from stock funds in 2008, down substantially from the $91 billion they invested, on net, the previous year. This decline in demand reflected, in part, the sizable drop in stock prices worldwide in 2008 (Figure 2.8). Major U.S. stock price indexes fell 37 percent even after taking into account any dividends that were paid. In 2008, domestic stock funds experienced a net outflow of $151 billion, on top of the $48 billion investors withdrew in 2007. Total returns on stocks traded on many foreign stock markets fared worse than those in the United States. The Morgan Stanley Capital International world total return stock index (excluding U.S. stocks) fell 44 percent in 2008; the emerging markets total return index dropped 53 percent. Consequently, funds investing in foreign companies experienced a sharp reversal of flows in 2008. Investors withdrew $82 billion from these funds in 2008, after investing over $100 billion annually since 2004.

FIGURE 2.8

Flows to Equity Funds Related to Global Stock Price Performance

1994–2008

Figure 2.8

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¹The total return on equities is measured as the year-over-year change in the MSCI All Country World Total Return Stock Index.
²Net new cash flow to equity funds is plotted as a six-month moving average.
Sources: Investment Company Institute and Morgan Stanley Capital International

Investors tend to own stock mutual funds with relatively low fees, expenses, and turnover rates. Mutual fund assets are heavily concentrated in funds with below-median expenses and below-average turnover. The turnover rate—the lesser of purchases or sales (excluding those of short-term assets) in a fund’s portfolio scaled by average net assets—is a measure of a fund’s trading activity. In 2008, the asset-weighted annual turnover rate experienced by stock fund investors moved up to 59 percent, in line with the average experience of the past 35 years (Figure 2.9).

FIGURE 2.9

Turnover Rate¹ Experienced by Stock Fund Investors²

Percentage, 1974–2008

Figure 2.9

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¹The turnover rate is an asset-weighted average.
²Variable annuities are excluded.
Sources: Investment Company Institute; Data © CRSP University of Chicago, used with permission, all rights reserved (312.263.6400/www.crsp.com); and Strategic Insight Simfund

About half of stock fund assets were in funds with portfolio turnover rates under 50 percent. This reflects shareholders’ tendency to own stock funds with below-average turnover and the propensity for funds with below-average turnover to attract more shareholder dollars.

Asset-Weighted Turnover Rate

To analyze the turnover rate that shareholders actually experience in their funds, it is important to identify those stock funds in which shareholders are most heavily invested. Neither a simple average nor a median takes into account where stock fund assets are concentrated. An asset-weighted average gives more weight to funds with large amounts of assets and, accordingly, indicates the average portfolio turnover actually experienced by fund shareholders.

Bond and Hybrid Funds

In 2008, investors added $27 billion to their bond fund holdings, down substantially from the $109 billion pace of net investment in the previous year. Through August 2008, net inflows to bond funds were about the same pace as in 2007. During the remainder of the year, investors withdrew $65 billion from bond funds, likely in response to heightened concerns about corporate credit quality following several high-profile company failures and government bailouts.

Traditionally, cash flow into bond funds is highly correlated with the performance of bonds (Figure 2.10). The U.S. interest rate environment typically has played a prominent role in the demand for bond funds. Movements in short- and long-term interest rates can significantly alter the returns offered by these types of funds and, in turn, influence retail and institutional investor demand for bond funds.
In the first eight months of 2008, the pace of inflows into bond funds remained strong. Some of this strength likely was the result of returns on high-grade bonds that ranged between 7 percent and 9 percent at an annual rate. As interest rates jumped on intermediate- to long-term corporate bonds, bond returns dropped sharply, prompting investors to pull money out of bond funds starting in September 2008.

FIGURE 2.10

Flows to Bond Funds Related to Bond Returns

1994–2008

Figure 2.10

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¹The total return on bonds is measured as the year-over-year change in the Citigroup Broad Investment Grade Bond Index.
²Net new cash flow to bond funds is plotted as three-month moving average of net new cash flow as a percentage of previous month-end assets. The data exclude flows to high-yield bond funds.
Sources: Investment Company Institute and Citigroup

Since 2004, inflows to bond funds have been stronger than what would have been expected based on the historical relationship between bond returns and demand for bond funds. One factor that may have contributed to this development is the increasing use of funds of funds. Despite the downturns in the equity and bond markets in 2008, funds of funds remained a popular choice with investors. Such funds still garnered net inflows, though down from the previous year, amounting to $63 billion in 2008 (Figure 2.11). Net inflows to funds of funds totaled $370 billion from year-end 2004 to year-end 2008 and a portion of these flows was directed to underlying bond mutual funds. Another factor may be that households became less willing to take risk after stock market turbulence re-emerged in 2000 following a long hiatus.

Investor demand for hybrid funds, which invest in a combination of stocks and bonds, dropped off in 2008, with investors withdrawing $19 billion from these funds, in contrast to an inflow of $23 billion the previous year. Over the five-year period of 2004 to 2008, hybrid funds attracted a total of $79 billion in net new cash.

fund of funds

Funds of funds are mutual funds that primarily hold and invest in shares of other mutual funds. The most popular type of these funds is hybrid funds—over 80 percent of funds of funds’ total net assets are in hybrid funds of funds. Hybrid funds of funds invest their net cash in underlying stock, bond, and hybrid mutual funds.

Assets of funds of funds have grown rapidly over the past decade. By the end of 2008, the number of funds of funds had grown to 865, and total assets were $489 billion (Figure 2.11). Two-thirds of the increase in assets of funds of funds in the past 10 years is attributable to increasing investor interest in lifestyle and lifecycle funds. The growing popularity of these funds, especially for retirement investing, likely reflects the automatic rebalancing features of these products. Lifestyle funds, also known as risk-based funds, maintain a predetermined risk level, and lifecycle funds, also known as target date funds, allow a predetermined reallocation of risk over time. Since year-end 1998, funds of funds received a total of $488 billion in net new cash, of which 69 percent was from lifestyle and lifecycle funds.

FIGURE 2.11

TOTAL Net Assets and Net New Cash Flow to Funds of Funds

1998–2008

	Number of funds (year-end)	Total net assets (billions of dollars, year-end)	Net new cash flow (billions of dollars, annual)
1998	175	$35	$6
1999	212	48	7
2000	215	57	10
2001	213	63	9
2002	268	69	12
2003	301	123	30
2004	375	200	51
2005	475	306	79
2006	604	471	101
2007	723	640	127
2008	865	489	63

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Index Funds

Index mutual funds also are popular with investors. Thirteen percent of U.S. households owned at least one index fund. Of households that owned mutual funds, 30 percent owned at least one index mutual fund. As of year-end 2008, 368 index funds managed total assets of $604 billion. Similar to funds of funds, demand for index funds remained relatively strong in 2008 with investors adding $34 billion in net new cash flow to these funds (Figure 2.12). Over 90 percent of the new money that flowed to index funds was invested in funds indexed to domestic equity indexes. Demand for global and international equity index funds declined substantially in 2008, with these funds experiencing an aggregate outflow for the first time in the past 16 years.

FIGURE 2.12

Net New Cash Flow to Index Mutual Funds Remained Positive in 2008

Billions of dollars, 1995–2008

Figure 2.12

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Note: Components may not add to the total because of rounding.

Equity index funds accounted for the bulk of index mutual fund assets at year-end 2008. Eighty percent of index mutual fund assets were invested in index funds that track either the S&P 500 index or other domestic and international equity indexes (Figure 2.13). Funds indexed to the S&P 500 index managed 42 percent of all assets invested in index mutual funds. The share of assets invested in equity index funds relative to all equity mutual funds assets moved up to 13 percent after hovering between 11 percent and 11.5 percent for the previous five years (Figure 2.14).

FIGURE 2.13

Over 40 Percent of Index Mutual FundS’ total net Assets were Invested in S&P 500 Index Funds

Percentage, 2008

Figure 2.13

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fIGURE 2.14

Equity Index Mutual Funds’ Share Continued to Rise

Percentage of equity mutual fund total net assets, 1994–2008

Figuree 2.14

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Demand for Money Market Funds

Net new cash to money market funds, particularly those funds invested only in U.S. government securities, remained strong in 2008, likely reflecting the flight to safety by investors in response to a deepening of the crisis in financial markets.

Retail Money Market Funds

Retail money market funds, which are principally sold to individual investors, received net new cash of $112 billion in 2008, following an inflow of $172 billion the previous year (Figure 2.15). Money fund yields followed the pattern of short-term interest rates, dropping fairly steadily throughout the year. The difference between yields on money market funds and those on bank deposits narrowed significantly from a little over 300 basis points at the start of 2008 to only 16 basis points by the end of the year (Figure 2.16). In general, retail investors tend to withdraw cash from money market funds when the interest rate spread narrows to a low level. Flows to retail money market funds in 2008 likely were boosted by investors’ reactions to negative developments in the stock and bond markets.

FIGURE 2.15

Flows to Money Market Funds REMAINED STRONG IN 2008

Billions of dollars, 1994–2008

Figure 2.15

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FIGURE 2.16

Flows to Taxable Retail Money Market Funds Related to Interest Rate Spread

1994–2008

Figure 2.16

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¹Net new cash flow is a percentage of previous month-end taxable retail money market fund assets and is shown as a six-month moving average.
²The interest rate spread is the difference between the taxable retail money market fund yield and the average interest rate on money market deposit accounts.
Sources: Investment Company Institute, iMoneyNet, and Bank Rate Monitor

Institutional Money Market Funds

Institutional money market funds—used by businesses, pension funds, state and local governments, and other large investors—had inflows of $525 billion in 2008, following inflows of $483 billion the previous year (Figure 2.15). Inflows to institutional money market funds likely were boosted by several factors. First, short-term interest rates fell considerably during 2008 as the Federal Reserve eased monetary policy. Institutional money market funds tend to receive inflows when short-term interest rates decline because the yields on these funds lag behind and are therefore higher than those available on competing products, such as direct investments in commercial paper and short-term U.S. Treasury instruments.

Second, the turmoil and illiquidity in credit markets that began in August 2007 intensified in 2008 and likely prompted corporate treasurers to make even greater use of institutional money market funds. Some corporate treasurers—cognizant of the lack of liquidity in short-term credit markets and concerned about their ability to adequately monitor and assess credit quality—may have taken the opportunity to redirect some portion of their companies’ liquid assets away from direct purchases of short-term instruments and toward institutional money market funds. At year-end 2008, U.S. nonfinancial businesses held a record 32 percent of their short-term assets in money market funds (Figure 2.17). Institutional money market funds also received inflows from investors moving from unregistered cash pools and other cash-like investments during the credit crisis.

FIGURE 2.17

Money Market Funds Managed 32 Percent of U.S. Businesses’ Short-Term Assets* in 2008

Percentage, year-end, 1994–2008

Figure 2.17

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*U.S. nonfinancial businesses’ short-term assets consist of foreign deposits, checkable deposits, time and savings deposits, money market funds, repurchase agreements, and commercial paper.
Sources: Investment Company Institute and Federal Reserve Board

Third, deteriorating corporate credit quality in general—and more specifically, the default of Lehman Brothers on its debt, which resulted in the breaking of the dollar NAV by Reserve Primary Fund (an institutional money market fund)—influenced the type of money market funds toward which institutional investors gravitated. Primary Fund’s losses in September 2008 led investors in other non-government (prime) money market funds to question whether their funds might also have difficulty maintaining a $1 NAV. This concern—in addition to broader concerns about the stability of U.S. and European financial institutions, the creditworthiness of their debt, and the willingness and wherewithal of the United States and foreign governments to support those institutions—led investors to seek out the liquidity and safety of money market funds that invest primarily in U.S. government securities. These funds, which can invest in U.S. Treasury debt solely or a combination of U.S. Treasury debt and obligations of U.S. government agencies, received a record $594 billion in net new cash flow in 2008 (Figure 2.18). Eighty-two percent of this new cash was invested after August 2008. As of year-end 2008, U.S. government money market funds accounted for 52 percent of total assets of taxable institutional money market funds, up from 34 percent at year-end 2007.

For more complete data on money market funds, see Section 4 in the Data Tables.

FIGURE 2.18

TOTAL Net Assets and Net New Cash Flow to U.S. Government and Non-Government Taxable Institutional Money Market Funds

Billions of dollars, 1998–2008

	U.S. Government		NON-GOVERNMENT
Year	Total net assets (year-end)	Net new cash flow (annual)	Total net assets (year-end)	Net new cash flow
1998	$184	$27	$286	$69
1999	195	9	405	101
2000	215	16	513	92
2001	282	69	789	254
2002	304	5	822	13
2003	275	-32	743	-90
2004	257	-22	687	-62
2005	270	15	766	37
2006	284	10	908	130
2007	565	275	1,119	174
2008: Jan–Aug	692	105	1,308	165
2008: Sep–Dec	1,189	489	1,098	-234

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