Lipper: June Harvests Bumper Crop of Fund Inflows

July 22, 2003 ( - Enjoying their greatest inflow month since March 2002, stock mutual funds continued to be the belle of the ball, adding $19.5 billion in fresh funds in June.

The good karma was not limited to just equity funds either.   Across the board, mutual funds were bursting at the seems to the tune of $44 billion new dollars, as bond funds gained $6.5 billion and money markets added $18 billion in June , according to the monthly mutual fund flow report from Lipper, Inc.

However the news was made in the rush to equities, the largest monthly inflow since $29 billion poured into the coffers in March 2002.   US Diversified funds were in again in strong favor during June, adding $9.9 billion.   Trying to outdo a month of bests among equity funds, Diversifieds turned in their best inflow since April of 2002.

Likewise, inflows were seen in:

  • Mixed & Miscellaneous Equity ($6.9 billion)
  • World Equity ($1.1 billion)
  • S&P 500 Index ($1 billion)

Despite this overall positive gain seen in stock mutual funds, Lipper sees investors toeing the water of the equity pool before jumping back in.   Evidence of this is can be found in sector fund investments that saw a miniscule $0.6 billion inflow for the month, with the majority of that going into real estate funds.  

Further, was the seesawing of in- and out- flows among other sectors, whichgenerally are regarded as aggressive investment choices.  After leading the domestic-fund performance standings at midyear, Science & Technology funds managed an inflow of over $250 million in June, a mere 2% of the $14 billion in outflows they had sustained in 2002 through early 2003. Elsewhere among sectors, Gold, Financial Services, Telecommunications, and Utility funds all registered small outflows, while Health/Biotechnology and Natural Resources types managed small net money gains.

class=”default”> Other Funds

Healthy inflow totals into bond funds continued in June, although the estimated $6.5 billion amount was below May’s $8.1 billion (See Stock, Bond Funds Continue to Swell in May),an amount that also represented the smallest monthly total since October 2002 .   This change almost surely reflected a combination of bond-price declines after midmonth plus some pull in the direction of taking more risk as the equity rally topped 13 weeks in duration and a near-30% stock market gain.

Additionally, money market funds had their first monthly net inflows since November, but taxable institutional classes – often dominated by corporate treasury decisions – had additions of $24 billion while taxable retail classes saw a stepped-up drain of $10 billion.