Investing March 27, 2003

Funds Net $10.4 Billion February Inflow

March 27, 2003 (PLANSPONSOR.com) - Strong bond fund gains were able to overcome equity outflows as mutual funds achieved inflows of $10.4 billion in February.
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Corporate bond funds took in $8.2 billion and an additional $6.1 billion intake was accumulated in government bond funds, both totals higher than the $6.8 billion and $4.7 billion, respectively, that flowed into the categories in January (See   Assets Flow Into Funds at Start 2003).   Other inflows were also recorded in international/global bonds funds and tax-free bond funds, amassing $1.1 billion and $1.8 billion, respectively in February,according to a Financial Research Corporate (FRC) report.

Conversely, domestic equity funds could not hold on to the positive inflows recorded in January, turning in a net outflow of $6.8 billion.   Year-to-date, domestic equities are now in the red, with a net outflow of $5.4 billion.   Comparatively, all other categories have started 2003 with inflows:   corporate bonds ($15.0 billion), government bonds ($10.9), international/global bonds ($2.8) and tax-free bonds ($2.0).

Almost a mirror image of January’s figures, February was good to bond funds.  In terms of net flows, all of the top five Morningstar fund categories belonged to bond funds.  Intermediate-term bond funds again held the top stop, accumulating $3.2 billion for the month. 

Playing second fiddle, were inflows seen in high yield bonds of $2.8 billion.   Rounding out the top five February inflow categories were:

  • Short-term bonds – $2.6 billion
  • Intermediate-term bonds – $2.1 billion
  • Ultra short bonds – $1.8 billion

Family Reunion

Falling into the same rank as the previous month, the Vanguard Group and Fidelity Investments were once again head of the class in terms of total assets, with $466 billion and $452 billion, respectively.  Behind the two sizeable fund families in the total asset race were:

  • American Funds – $319 billion
  • Franklin Distributors Inc – $147 billion
  • Putnam Investments – $126 billion

However, the order got shuffled in February’s best-sellers list, as number one and two dosey-doed.    PIMCO Funds held this month’s top stop, recording net flows of $2.6 billion, with American Funds gaining $2.3 billion.  Rounding out the top five in monthly net inflows were:

  • Vanguard Group – $2.0 billion
  • MFS Investment Management – $1.1 billion
  • Goldman Sachs Asset Management – $981 million

Year-to-date, the top three held true to the month’s order, with American Funds on top after $6.1 billion in net flow.   PIMCO followed closely behind obtaining $5.9 billion and the Vanguard Group tallied $4.7 billion thus far in 2003.   Finishing out the top five list was Goldman Sachs and Evergreen Investments with $1.9 billion and 1.7 billion in year-to-date net inflows, respectively.

Individual Performance

Holding true to the previous three months, PIMCO Total Return maintained the top stop, besting its peers among February’s net flows with $843 million.  PIMCO was also represented in the second sport, with the firm’s Low Duration fund adding $798 million, followed by the Evergreen Adjustable Rate $673 million for the month.  American’s Cap Inc Bldr, collecting $550 million and Vanguard’s GNMA fund, recording a net inflow for the month of $517 million, held the fourth and fifth spots.

Excluded from the report is all data from money market funds.

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