Bill, well-done on being from Missouri. Meanwhile, here's an article from today's NY Times...
July 11, 1997
Market Place: Investments Top $4 Trillion, Industry Says
By EDWARD WYATT
NEW YORK -- Mutual funds that invest in stocks added $18 billion in fresh cash in June, a trade group estimated Thursday. Combined with the stock market's continued strong performance and investors' recent additions to money market funds, those gains appeared to be large enough to push the total assets in stock, bond and money market funds above $4 trillion for the first time.
Last month's estimated flows of cash into stock funds were significantly stronger than the $14.5 billion recorded in June 1996, but down from the $20 billion in May, according to data released Thursday by the Investment Company Institute.
The latest figures brought the net inflows to stock funds in the first half of 1997 to $111 billion, more than the amount added to stock funds in any full year before 1993.
While that figure is about 20 percent below the $138 billion that equity funds collected in the first six months of 1996, it is a little more than half the record $221 billion that flowed into stock funds in all of last year.
Whether investors have the stamina to take a run at last year's record contributions will depend in large part on the momentum of the stock market, which is up 22.3 percent so far this year, but stalled this week just before the Dow Jones industrial average would have reached the 8,000 level.
Cash flows into mutual funds fell sharply in the second half of 1996, in large part because stock prices swooned last July. But that has not been the trend every year. In four of the last six years, cash flows in the second half of the year equaled or were better than those in the first half.
There is some debate as to whether mutual fund cash flows lead or follow the stock market. In the recent past, however, evidence points to the latter. Last July, as the market dived, net inflows to stock funds dipped to $5.7 billion, their lowest in 18 months. But by the following month, the market had recovered and contributions resumed a record-setting pace.
The Investment Company Institute also reported Thursday that bond funds added an estimated $2.5 billion in June, compared with $2.8 billion in May, and a net outflow of $220 million in June 1996. In the first six months of the year, bond funds added $9.6 billion, according to the trade group.
Together with the $979 billion of assets in money market funds as of July 2, total assets in all mutual funds -- those that invest in stocks, bonds and money markets -- exceeded $4 trillion at the beginning of July. Stock funds accounted for more than half of those, or about $2.1 billion.
If recent history continues, the cash-flow estimates for stock funds reported Thursday will be revised upward at the end of this month, when the Investment Company Institute releases final figures for June. In the 17 months since the institute started issuing a preliminary estimate of cash flows, the estimate has later been increased 13 times. The average revision has been slightly less than 10 percent. |
