New Money Continues to Pour into Mutual Funds

January 30, 2001 ( New money continued to pour into mutual funds in December, amounting to an increase of 2.2% to $6.967 trillion, according to data compiled by the Investment Company Institute (ICI).

Despite a volatile market and a slowing economy, stock funds proved the most popular, while money market funds gained $16.6 billion in new money in December, a decrease from the $56 billion in new inflows posted in November.

For the month of December 2000 compared to November 2000, fund categories showed the following gains:

  • stock funds grew the most in (2.8%), to $3,96 trillion in net assets
  • hybrid funds hit $350 billion (up 2.3%)
  • muni bond funds hit $278 billion (up 2.2%)
  • taxable bond funds were up 1.5% to $531 billion
  • taxable money markets were up 1.2% to $1.60 billion; and
  • tax free money markets funds gained 2.2% to $238 billion in net assets.

New Cash Injections
The ICI study also found that new cash flow into stock funds for 2000 was $309.34 billion, compared with $187.67 billion in 1999. The previous record for annual cash flow was $227.1 billion in 1997.
Some funds saw a decrease in net assets:

  • Hybrid funds in December saw $1.56-billion outflow of money, compared with an outflow of $263 million in November.
  • Taxable bond funds had an outflow of $1.22 billion in December, compared with an outflow of $646 million in November.
  • Municipal bond funds had an inflow of $240 million in December, compared with an inflow of $9 million in November.

In the survey, mutual fund companies report actual assets, sales and redemptions to the ICI.