Investing September 23, 2002

Equity Outflows Slow, But Still Flow

September 23, 2002 (PLANSPONSOR.com) - Investors still yanked money out of stock mutual funds in August, but at a comparative trickle compared to the raging $49 billion outflow torrent in July.

Reported by

Fred Schneyer

According to mutual fund research firm Lipper Inc., investors dumped $5.8 billion in stock funds – down 90% from the month before. (See Funds Flee Stock Funds in July )

Lipper said that made August the first month since December 1988 when US equities rose (measured by the S&P 500), but investors still pulled back from equities.

Large-cap funds – the most widely held equity fund – saw their 20th straight month of outflows at $5.5 billion. Meanwhile, balanced funds saw a nearly $200 million in inflow, world equity funds had $2 billion in outflows while sector funds gave back about $400 million, Lipper said.

Institutional equity funds net inflows of $250 million played a small part in August’s overall equity fund flow picture.

The flight to safety through fixed income also slowed in August, Lipper said, with $19.4 billion added to income funds other than money market offerings. Of that, $15.1 million were in funds holding short and intermediate term instruments while $4.3 million were in long bonds.

GNMA Mortgage funds led all types with $1.9 billion in net inflows.

The Lipper report said money market funds saw a $36.9 billion net outflow in August – just about split between institutional and retail investors.