Funds Hit With Substantial May Setback

June 24, 2004 ( - May's emerging spring wasn't all that kind to mutual funds, with stock and bond fund offerings suffering an $11.2 billion setback.

A news release from the Financial Research Corporation (FRC) said May’s lackluster performance was a dramatic collapse from the $27.6 billion inflow seen in April. Leading the way among fund types in May were international/global offerings which ended the month ahead by $2.39 billion.

The FRC said all other fund types were in the red in May with corporate bond funds getting smacked with a $5.56 billion outflow, while tax-free bonds had a $5.37 billion loss. Government bond funds had a $2.28 billion giveback for the period. On the equity side, domestic equity funds had a $449 million outflow

Per Morningstar fund category, it was Moderate Allocation funds leading the way in May with a $2.98 inflow ($27.2 billion YTD). Large-Cap value offerings were next in line with a $1.65 billion intake ($21.8 billion YTD) while Foreign Large-Cap Blend funds were ahead by $1.57 billion ($13.2 billion YTD). Bank loan was next at $1.29 billion in May ($3.21 billion YTD) while World Allocation funds showed a $1.16 advance ($8.32 billion YTD).

Fund Families

Vanguard Group and Fidelity Investments maintained the top fund group spots in May with $654 billion and $637 billion, respectively.  Behind the two sizeable fund families in the total asset race were:

  • American Funds – $534 billion
  • Franklin Distributors Inc. – $192 billion
  • PIMCO Funds – $151 billion.

The five best sellers in May were American Funds with an inflow of $5.3 billion, Barclays Global Investors Funds’ increase of $2.13 billion, Dodge and Cox with a $769 million advance, The Vanguard Group with an increase of $581 billion, and Dimensional Fund Advisors at $573 million.

Top Sellers

The five best selling individual funds in May were:

  • American Funds Growth Fund – $1.2 billion
  • American Funds Balanced – $954 million
  • American Funds Cap Income Builder – $618 million
  • Rydex Juno Fund – $609 million
  • American Funds Income Fund – $584 million