December Dreary For Fund Flows

January 28, 2003 ( - Despite gains in Corporate funds, December saw net outflows of $169 million for stock and bond mutual funds.

Leading the exodus was the $4.1 billion taken out of domestic equity funds and an additional $1.2 billion that fled international/global bond funds.   The losses proved insurmountable for corporate funds that led December in net inflows, gaining $3.1 billion, followed by government with a $1.6 billion intake, according to data from the Financial Research Corporation (FRC).

The $169 million outflow was relatively tame compared to last December’s $2.1 billion heading for the exits, but stood in stark contrast to November’s inflow of $12.7 billion   (See  Sweeter Markets Draw Funds In November ).

Categorically Speaking

As was the case for most of 2002, December was once again the month of the bond. In terms of net flows, four of the top five Morningstar fund categories belonged to pure bond funds.   Intermediate-term bonds led the charge, amassing $1.6 billion in December.   Following up this performance was short-term bond with a net flow of $1.3 billion and the list’s lone non-pure bond representative, domestic hybrid also gaining $1.3 billion.   Rounding out the top five was high-yield and intermediate-term governments adding $1 billion and $700 million, respectively.  

Family Affair

The Vanguard Group and Fidelity Investments were once again head of the class in terms of total assets, with $472 billion and $464 billion, respectively.   Behind the two sizeable fund families in the total asset race were:

  • American Funds – $325 billion
  • Franklin Distributors Inc – $149 billion
  • Putnam Investments – $133 billion

However, the December best-sellers list painted a slightly different picture. American Funds did the best among funds groups, recording net flows of $2.7 billion, with Vanguard taking the silver medal gaining $2.3 billion.  Rounding out the top five in monthly net inflows were:

  • PIMCO Funds – $2.0 billion
  • Fidelity Distributors – $1.6 billion
  • Dodge & Cox – $1.1 billion

Year-to-date held true to December’s order, with American Funds on top after $38.8 billion in net flow, while Vanguard followed closely behind obtaining $38.1 billion in 2002.  The same funds as the monthly list made up the remaining top five in year-to-date net inflows:

  • PIMCO Funds – $27.4 billion
  • Fidelity Distributors – $10.7 billion
  • Dodge & Cox – $9.9 billion

Individual Excellence

PIMCO Total Return regained the crown, besting its peers among December’s net flows with $923 million, edging out November’s largest flower, American’s Growth Fund, coming in fourth with $543 million.  Coming in second was Vanguard Total Stock Index adding $820 million, followed by Dodge & Cox Stock Fund acquiring $702 million for the month.   American’s Cap Inc Bldr, collecting $524 million, held the fifth spot.

PIMCO Total Return was equally impressive for 2002, amassing $14.5 billion in net flows compared to the American’s Growth Fund’s $7.7 billion, one spot back. The rest of the year’s best included gains by:

  • American’s Balanced Fund – $7.5 billion
  • Vanguard GNMA Fund – $7 billion
  • Dodge & Cox Stock Fund – $6 billion

Excluded from the report is all data from money market funds.