Fund Flows Turn Negative in March
So-called long-term funds – stock, bond, and hybrid funds – had a net inflow of just $43 million in March, compared with an inflow of $27.8 billion in February (see Mutual Funds Make a Comeback in February ), according to the Investment Company Institute.
Equity funds – both international and domestic offerings – suffered net outflows. Overall stock funds posted an outflow of $10.14 billion in March, more than reversing the $9.59 billion inflow of the prior month. Among stock funds, world equity funds (US funds that invest primarily overseas) posted an outflow of $929.0 million in March – a dramatic turnaround from the inflow of $5.95 billion in February. Funds that invest primarily in the US had an outflow of $9.21 billion in March, nearly three times the February outflow of $3.64 billion.
Hybrid Hiatus?
Hybrid funds – which include asset allocation funds (see Asset Allocated Funds Grow As Retirement Assets Increase ) – managed to attract funds on a net basis, but just $207.0 million in March, compared with an inflow of $3.27 billion in February.
Money market funds had an inflow of $56.80 billion in March, but that was only about half the $96.08 billion February inflow. March’s inflow was split between those offered primarily to institutions ($28.47 billion) and individuals ($28.33 billion).
Even bond funds, which had an inflow of $9.98 billion in March – drew only two-thirds the $14.94 billion inflow of the prior month. Taxable bond funds also dropped off ($7.43 billion March inflow, versus $13.73 billion in February). The single category exception for the month: municipal bond funds, whose $2.55 billion inflow last month more than doubled the inflow of $1.21 billion in February.
Little wonder that the combined assets of the nation’s mutual funds actually decreased by $24.1 billion, or 0.2%, to $11.734 trillion in March, according to the Investment Company Institute’s official survey of the mutual fund industry.
Total Net Assets of Mutual Funds
(billions of dollars)
style="TEXT-ALIGN: right"> Mar 08 | style="TEXT-ALIGN: right"> Feb 08 | style="TEXT-ALIGN: right"> % chg | style="TEXT-ALIGN: right"> Dec 07 | |
Stock Funds | style="TEXT-ALIGN: right"> 5,869.9 | style="TEXT-ALIGN: right"> 5,964.2R | style="TEXT-ALIGN: right"> -1.6 | style="TEXT-ALIGN: right"> 6,528.0 |
Hybrid Funds | style="TEXT-ALIGN: right"> 676.4 | style="TEXT-ALIGN: right"> 682.3R | style="TEXT-ALIGN: right"> -0.9 | style="TEXT-ALIGN: right"> 714.3 |
Taxable Bond Funds | style="TEXT-ALIGN: right"> 1,348.0 | style="TEXT-ALIGN: right"> 1,348.6R | style="TEXT-ALIGN: right"> 0.0 | style="TEXT-ALIGN: right"> 1,305.5 |
Municipal Bond Funds | style="TEXT-ALIGN: right"> 372.8 | style="TEXT-ALIGN: right"> 362.4R | style="TEXT-ALIGN: right"> 2.9 | style="TEXT-ALIGN: right"> 373.9 |
Taxable Money Market Funds | style="TEXT-ALIGN: right"> 2,979.9 | style="TEXT-ALIGN: right"> 2,933.3R | style="TEXT-ALIGN: right"> 1.6 | style="TEXT-ALIGN: right"> 2,650.0 |
Tax-Free Money Market Funds | style="TEXT-ALIGN: right"> 487.3 | style="TEXT-ALIGN: right"> 467.7 | style="TEXT-ALIGN: right"> 4.2 | style="TEXT-ALIGN: right"> 467.6 |
Total | style="TEXT-ALIGN: right"> 11,734.3 | style="TEXT-ALIGN: right"> 11,758.4R | style="TEXT-ALIGN: right"> - 0.2 | style="TEXT-ALIGN: right"> 12,039.4 |
R=Revised data
Net New Cash Flow of Long-term Funds
(millions of dollars)
Stock Mutual Funds
style="TEXT-ALIGN: right"> Mar 2008 | style="TEXT-ALIGN: right"> Feb 2008 | style="TEXT-ALIGN: right"> YTD 2008 | style="TEXT-ALIGN: right"> YTD 2007 | |
New Sales | style="TEXT-ALIGN: right"> 112,293 | style="TEXT-ALIGN: right"> 117,277R | style="TEXT-ALIGN: right"> 388,089 | style="TEXT-ALIGN: right"> 391,316 |
Redemptions | style="TEXT-ALIGN: right"> -114,456 | style="TEXT-ALIGN: right"> -104,002R | style="TEXT-ALIGN: right"> -403,342 | style="TEXT-ALIGN: right"> -318,575 |
Exchanges In | style="TEXT-ALIGN: right"> 12,278 | style="TEXT-ALIGN: right"> 13,099R | style="TEXT-ALIGN: right"> 46,923 | style="TEXT-ALIGN: right"> 55,238 |
Exchanges Out | style="TEXT-ALIGN: right"> -20,257 | style="TEXT-ALIGN: right"> -16,784R | style="TEXT-ALIGN: right"> -76,879 | style="TEXT-ALIGN: right"> -63,595 |
Net New Cash Flow | style="TEXT-ALIGN: right"> -10,142 | style="TEXT-ALIGN: right"> 9,591R | style="TEXT-ALIGN: right"> -45,209 | style="TEXT-ALIGN: right"> 64,384 |
Hybrid Mutual Funds
New Sales | style="TEXT-ALIGN: right"> 14,819 | style="TEXT-ALIGN: right"> 14,382R | style="TEXT-ALIGN: right"> 48,261 | style="TEXT-ALIGN: right"> 40,603R |
Redemptions | style="TEXT-ALIGN: right"> -13,625 | style="TEXT-ALIGN: right"> -11,080R | style="TEXT-ALIGN: right"> -43,970 | style="TEXT-ALIGN: right"> -30,996R |
Exchanges In | style="TEXT-ALIGN: right"> 1,768 | style="TEXT-ALIGN: right"> 1,537R | style="TEXT-ALIGN: right"> 5,766 | style="TEXT-ALIGN: right"> 5,187R |
Exchanges Out | style="TEXT-ALIGN: right"> -2,755 | style="TEXT-ALIGN: right"> -1,570R | style="TEXT-ALIGN: right"> -8,060 | style="TEXT-ALIGN: right"> -4,981R |
Net New Cash Flow | style="TEXT-ALIGN: right"> 207 | style="TEXT-ALIGN: right"> 3,270R | style="TEXT-ALIGN: right"> 1,998 | style="TEXT-ALIGN: right"> 9,814R |