Stock, Bond Funds Continue to Swell in May

June 18, 2003 ( - Stock mutual funds continued to draw investor attention in May, but at just half the rabid pace in April.

According to preliminary estimates from fund tracker Lipper, stock funds took in a net $8.2 billion in May, just half the $16.1 billion of the prior month (see  Lipper: Equity Funds Rule April’s Inflows ).   However, Lipper said the drop off was anticipated since the April number had been extraordinarily large as a result of investors’ rush to the market following the end of the major fighting in Iraq, according to Reuters.

Bond funds also fared well, as taxable fixed-income funds received an estimated $ 8.1 billion, compared with $10.9 billion in April.   Municipal bond funds bettered their April outflow of $337 million, drawing in $1.3 billion in May.   All told, Lipper estimated that bond funds had inflows of $9.4 billion for May, while money market funds had outflows of $15.9 billion.

Investors were also drawn to the beneficiaries of the dividend tax cut, as net sales of income funds rose to $2.4 billion.   Balanced funds drew a new $1.25 billion inflow, while convertible securities funds pulled in $400 million. Among diversified stock funds, multi-cap funds did well with a $3 billion intake, followed by mid-cap funds with $2.6 billion.