Ill November Markets Shrivel Mutual Funds, Flows

December 27, 2000 ( - Slumping markets drew the nation's combined mutual fund assets down 5.2% in November to $6.826 trillion, as cash inflows shriveled and asset values tumbled.

The scenario is likely to be played out in 401(k) statements this quarter.

Stock mutual funds decreased by 10% ($428.5 billion) during the month, as net cash inflows of $8.82 billion were less than half of October’s $19.16 billion pace, according to Investment Company Institute figures.

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Assets of hybrid funds dropped by $11.1 billion and also had new outflows of $217 million for the month.  However, in October hybrid funds had suffered a net $1.17 billion outflow.

Bond fund assets actually increased by $679 million in November despite a net cash outflow of $639 million during the month.

Stocking Up?

With stock funds, domestic funds all experienced net cash inflows, but at a slower pace than in October, with:

  • Aggressive growth funds attracting a net $5.06 billion, down from $7.19 billion in October
  • Growth funds pulled in a net $3.99 billion in November, compared with $8.59 billion a month earlier
  • Growth and income funds had an inflow of $1.69 billion in November, in contrast to the net $262 million outflow in October.

On the other hand, stock funds that invest abroad saw some $2.88 billion in net cash outflow, up sharply from October’s $206 million pace.

Bond Reversal

Bond funds reversed October’s trends, with an outflow of $673 million in November for taxable bond funds, compared with $2.58 billion in October.   Municipal bond funds managed to attract a net $34 million in new November cash investment, down sharply from an inflow of $589 million in October.