Stock Funds See Inflows Rise After July's Market Jitters
May 10, 2011
NEW YORK -- It looks like investors are returning this month to mutual funds after being scared off by July's bumpy market. Figures released Wednesday by the Investment Company Institute show how scared they were: They put just $5.14 billion into stock and bond funds, down 64% from the $14.2 billion they invested in during June. Total net new cash flow was $27.5 billion in July, more than three times June's $7.8 billion inflow, according to the ICI, a mutual funds trade group in Washington, D.C. But $22.35 billion of that went into money market funds, considered safe harbors for frightened investors in times of market troubles. They were buoyed in part by exchanges out of stock and bond funds. But August looks good so far. Though money market funds continue to draw big numbers -- $23.4 billion in three weeks -- stock funds are also doing well. They gained $11.5 billion in the first three weeks, according to AMG Data Services in Arcata, Calif.. Even bond funds were up -- by $1.5 billion. Stock funds took in just $6.2 billion in net new cash flow last month, less than half the June total of nearly $14.5 billion. Still, it's better than ICI's estimate, issued earlier this month, which put July stock fund inflows at a mere $3.5 billion. Bond funds, which had leaked in June, gushed a little faster in July: Outflows came to $1 billion, up from $214.5 million. In all, mutual funds held $3.14 trillion at the end of July, down from $3.18 trillion in June, ICI says. Stock funds had the biggest piece of the overall pie, with net assets totaling $1.47 trillion. Bond funds had $829 billion, taxable money market funds $707 billion and tax-exempt money market funds $136 billion. Stock fund flows reached their lowest level last month since January 2010, according to the ICI. The 1.3% decline in total industry assets in July was the first since November 2009.
