Net Equity Fund Flows Remain Positive

December 20, 2001 ( - Some $10.5 billion in new money flowed into the US equity market in November- the second consecutive month of equity inflows after October's $2 billion inflow, according to data tracker Lipper Inc.

November was the sixth month of inflows for stock funds this year – bringing the year-to-date total to about $32 billion. According to Lipper, contributions to retirement plans are a major reason that flows to stock funds have turned positive in October and November.

Diversified Funds

Diversified stock funds, with $7.7 billion in net inflows, accounted for most of the money, and of these,

· value-oriented funds attracted over $4.3 billion,
· while growth funds took in $2.7 billion

Among the diversified funds

· those investing in large caps had an outflow of $1.1 billion,
· while those investing in mid or small caps generated positive net sales

In November, the average diversified stock fund increased 7.62%

The rebound in investor sentiment, which appears to be continuing into December, follows net withdrawals from US stocks in the three previous stocks.

Provider Profiles

According to the Associated Press:

  • Fidelity Investments reported positive flows into its stock funds, so far in December, following net sales of $2.1 billion in November. Flows into equities have come at the expense of the group’s money market and bond funds, which have both seen outflows, after positive flows the previous month
  • T. Rowe Price Group Inc. has also seen positive flows into its stock funds this month, following moderate to strong equity flows in November.
  • The Vanguard Group reported net sales of $1.8 billion for its stock funds in November while its bond funds drew $1.1 billion of net new money and about $450 million was made in sales in money market funds.

Fixed Income

Bond mutual funds attracted about $3 billion in November, which was only 25% of October inflow and the smallest inflow since April, according to Lipper.

Money market funds took in a net $56 billion in November, boosting the year-to-date total to $353 billion, exceeding the $130 billion recorded for all of 2000 and $194 billion in 1999.