Investor Attraction to Mutual Funds On Again in July

August 28, 2006 ( - With investors' attraction to mutual funds exhibiting an on-again, off-again pattern, stock and bond funds enjoyed $7 billion in net inflows in July, following $2.7 billion in June outflows and $5.3 billion in May inflows, according to new data.

The Financial Research Corporation’s (FRC) July data indicated that International/Global funds led the way during the month with $7.3 billion in inflows – allowing the category to retake the top spot it held in May but gave up in June (See Fund Flows Reverse Course in June ).  

The July data further showed that Corporate Fixed Income funds came in second with a $2.5 billion advance, followed by Tax-free funds with a $161 million July advance. Domestic equity funds gave up $1.9 billion and Government Bond funds retreated by $905 million over the month.

By Morningstar category, Small Blend funds outperformed all other asset categories in July with $3.7 billion in net inflows, followed by Foreign Large Blend ($1.8 billion), Intermediate Term Bond ($1.6 billion), Specialty Real Estate ($1.4 billion), and World Allocation ($1.3 billion).

Barclays Global Investors Funds came in first among the fund groups with a $4.6 billion inflow, with American Funds following at $3.4 billion, Vanguard at $1.2 billion, PIMCO with a $576 million advance and Franklin Templeton at $222 million. Squarely in the red for the month was Fidelity with a $2.2 billion outflow. Putnam gave back $994 million during the month.

Two American Funds offerings held the top selling spots in July for individual funds – its Growth Fund of America pulled in $1 billion, while its Capital World Growth and Income was ahead by $719 million.