Investing June 30, 2006

Mutual Fund Assets Decline in May

June 30, 2006 (PLANSPONSOR.com) - The combined assets of the nation's mutual funds decreased by $170.8 billion, or 1.8%, to $9.3 trillion in May, according to the Investment Company Institute (ICI).
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ICI data shows significant retreats, with long-term funds – stock, bond and hybrid – reporting a net outflow of $794 million in May, compared to a net inflow of $27.59 billion in April.

Stock funds posted an inflow of $1.85 billion in May, much less than the $26.32 billion inflow in April. Among stock funds, world equity funds (US funds that invest primarily overseas) posted an inflow of $9.01 billion in May, versus $18.32 billion in April. However, funds that invest primarily in the US reversed course with an outflow of $7.16 billion in May, following an inflow of $8.0 billion in April.

In another significant turnaround, bond funds had an outflow of $2.48 billion in May, compared to an inflow of $937 million in April. Taxable bond funds had an outflow of $2.84 billion in May, versus an inflow of $1.20 billion in April. Meanwhile, municipal bond funds had a $360 million inflow in May, compared to an outflow of $267 million in April.

Hybrid funds posted an outflow of $165 million in May, compared to a $334 million inflow in April.

The recipients of the fleeing assets appeared to be m oney market funds which reported an inflow of $50.84 billion in May, compared to an outflow of $27.12 billion in April. Funds offered primarily to institutions had an inflow of $30.64 billion while funds offered primarily to individuals had an inflow of $20.20 billion.

Detailed ICI data is here .

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