Fund Flows to Return to Levels of Past Decade: FRC

The mutual fund industry will bounce back to historic inflow levels on the low to medium side, according to Financial Research Corp., attracting between $130 billion and $180 billion a year.

In the past two years, 2007 and 2008, gross sales and redemptions exceeded $2 trillion in each year, their highest ever, and the velocity of money movement will remain high for the next several years, according to FRC.

The fastest-growing channels will be independent and regional wirehouses and RIAs, while major wirehouse, bank and insurance channels will contract. In fact, RIA firms will contribute 55% of mutual fund net sales by 2013, up from 48% in 2008.

“There will be a tremendous amount of mutual fund money in motion,” said Maurice Leger, senior vice president, research, at FRC. “This will create a significant opportunity for winning asset managers to achieve outsized growth.”