Fund Flows Turn Negative in March

April 30, 2008 (PLANSPONSOR.com) - Money continued to flow into long-term mutual funds in March, albeit a trickle.

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

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