Mutual fund investors in the United States spearheaded Tuesday's Wall Street rally, the chief of the US$4 trillion mutual fund industry said yesterday.
Investment Company Institute chairman Don Powell said US fund holders increasingly used market downturns to top-up their holdings.
Mr Powell, who was attending the 11th International Fund Conference, said: 'Mutual funds are a source of stability rather than instability. Our shareholders tend to buy on dips rather than panic. Tuesday was a great example.' He said the response had also been demonstrated during the Mexico 'tequila crisis' and the record US bond market crash in 1994.
The conference has been discussing issues ranging from the role of mutual funds in pension provision, the economic outlook in member states and technical matters such as valuation and pricing of unlisted bonds and equities.
The handling of this week's stock market and currency crisis by Hong Kong's regulatory authorities was praised by the conference.
European Federation of Investment Funds and Companies president Julian Tregoning said his members anticipated rapid growth as European economies became increasingly integrated.
At present there is about $35 billion invested in funds of which 35 per cent is held in equities. This compares with 57 per cent equity exposure in US funds.
