Money Market Funds Drop $38B in August

September 27, 2002 ( - Money market mutual funds were the big losers in August with $38.3-billion outflow over the month-- a dramatic reversal from July's $54.5 billion inflow, an industry report said.

Of that August figure, the Investment Company Institute said institutional funds reported a $22.1 billion outflow.

Meanwhile, ICI said money continued flowing out of US equity mutual funds in August, but it was barely a puff of wind compared to the outflow hurricane that swept through stock funds the month before, an industry repot said.

ICI said investors walked off with $2.91 billion from domestic stock funds in August – an enormous drop from July’s $52.6 billion leaving equities for safer heavens. Domestic stock funds reported a $629 million August outflow while overseas equity funds showed a $2.2-billion outflow.

Bond funds enjoyed a healthy August, though not quite as rosy as July (see Money, Bond Funds Bulk Up in July  ).  Fixed income had a $17.3-billion August inflow, compared to the previous month’s torrent of new money totaling $28 billion. Taxable bond funds had a $13.5 billion inflow over the month while muni funds enjoyed a $3.7 billion inflow, ICI said.

Overall the combined assets of the nation’s mutual funds increased by $10.4 billion to $6.389 trillion in August, according to the ICI.