FRC: February Fund Flow Loses Some Punch

March 22, 2004 ( - When it comes to mutual fund flows, 2004 came in like a lion, but apparently soon lost at least some of its roar as stock and bond mutual funds' asset gain in February lagged the month before.

The funds (including exchange-traded funds) ended February with a $33-billion inflow – down from January’s strong showing of $46 billion flowing in,   according to a Financial Research Corporation (FRC) report (See  Equity Outpouring Helps January Win Fund Flow Race Going Away ).

Once again, it was domestic equities that led net inflows among fund types, netting $22.6 billion – likewise behind the $31.8 billion surging into funds in January while International/Global came in a distant second place in February with a $9.4 billion intake, down from January’s $13.4 billion. Corporate bond funds were way down in February with a scant $10 million in flow – down from January’s $3 billion. Government funds added $637 million in February while tax-free funds tacked on $331 million. Per Morningstar fund category, it was Moderate Allocation funds leading the way in February with a $5.5 billion inflow, followed by Large-Cap Value that accumulated $5.4 billion in the month. This was followed by Foreign Large-Cap Blend with a $2.7 billion gain, Large-Cap Blend with a $1.8 billion advance and World Allocation with a $1.7 billion add on.

Fund Families

Vanguard Group and Fidelity Investments held the top fund group spots in February, with $654 billion and $646 billion, respectively.  Behind the two sizeable fund families in the total asset race were:

  • American Funds – $522 billion
  • Franklin Distributors Inc. – $196 billion
  • PIMCO Funds – $150 billion.

Among February best sellers was American Funds at the top, netting a $8.9 billion inflow.  This was followed up by Vanguard’s $7.8 billion, Fidelity’s $4.2 billion, Dodge & Cox’s $1.8 billion, and PIMCO’s $1.7 billion.

Top Sellers

In the top slots for February hot fund sellers were:

  • American Funds Growth Fund – $1.8 billion
  • American Funds Balanced – $1.1 billion
  • American Funds Income Fund – $985 million
  • Dodge & Cox’s Stock Fund – $937 million.