Stock, Bond Funds Continue to Swell in May

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.