Investors Added $21 Billion to Stock Mutual Funds in April

May 23, 2001 ( - Investors responded to April's stock market rally by pouring $21 billion into equity mutual funds following record outflows of $15.4 billion in March, according to mutual fund tracking firm Lipper Inc.

The monthly inflows to equity funds followed net withdrawals, which have occurred rarely in the nineties bull market, in both February and March. The renewed appetite came as market indicators rebounded in April, specifically:

  • the Dow Jones industrial average rose by almost 9%,
  • the S&P 500 Index was up 9%,
  • the Nasdaq composite climbed 15%, and
  • the average US diversified stock fund increased by 8.8%.

Equity inflows came at the expense of fixed income funds as investors redeemed $1.4 billion from the bond market, the first outflows from this asset class in three months, and $10.2 billion drained from money market funds, as investors sought cash to pay tax bills. Overall net flows to the fund industry slowed to $9.4 billion in April.

Investors favored balanced, value and S&P 500 Index funds in April, while almost two thirds of the overall equity flow, some $13.8 billion can be attributed to US diversified equity funds. Further:

  • world equity funds netted inflows of $2.7 billion
  • S&P 500 Index Objective funds attracted $1.1 billion,
  • sector funds reported inflows of  $1 billion, and
  • balanced funds drew $800 million in inflows,  while
  • technology funds saw net inflows of $600 million.