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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (34074)	10/30/2001 12:28:06 AM
From: Larry S.	Read Replies (1) \| Respond to of 53068

Mutual fund flows - huge stock outflow in Sept, but inflows in October. Some outflow from bond funds, hmmm. huge build up in money market funds, especially by institutions. fodder. "Out in September, in during October. Investors withdrew $29.51 billion from stock mutual funds in September in the largest one-month exodus of cash on record, said the Investment Company Institute, the fund industry's largest trade group. The figures, compiled from data reported to the ICI by most of the nation's fund firms, reflected investor defections from the stock market in the wake of the Sept. 11 terrorist attacks. But in a striking reversal, several large fund companies say investors this month appear to have shaken off many of the market jitters that plagued them in September. At Boston-based Fidelity Investments, for example, the nation's largest fund company said that it saw net new money coming into stock funds in October for the first time since May. Similarly, San Francisco fund supermarket operator Charles Schwab Corp. said it saw a big swing from September money flowing out of stock funds to October's cash coming in. The ICI was quick to point out that, large as September's withdrawals from stock funds were, they represented only 0.87% of the fund industry's $3.02 trillion in stock-fund assets under management. By contrast, investors withdrew 3.1% of total stock-fund assets after the October 1987 stock-market crash. Despite the shocks of Sept. 11 and the stock-market drops throughout the month, shareholders didn't make wholesale redemptions from funds overall. Taxable bond funds saw net deposits of $7.96 billion in September, while municipal bond funds saw a slight cash drain of $335 million last month. Money-market mutual funds in September had deposits of $53.15 billion; a major portion of that was placed in funds for institutional investors. Money-market funds for individuals received net new money of $18.08 billion. As for the flow of money into funds in October, the swing to positive from negative is fairly drastic, according to recent spot checks. At Schwab, the money coming into stock funds totaled $506 million as of Friday, with an additional $778 million into bond funds. This is a big contrast from September, when investors pulled $2.17 billion out of stock funds; they also put in $523 million into bond funds that month. Similarly, Vanguard Group of Valley Forge, Pa., said it estimated that by the end of October it will receive $2.4 billion net new money going into stock funds, a net $2.2 billion going into bond funds, and a net $360 million going into money-market funds. In September, $1.4 billion flowed out of its stock funds, according to a spokesman. And last week, Franklin Resources of San Mateo, Calif., parent of the Franklin Templeton and the Mutual Series fund families, said that it had seen a "strong rebound" in domestic and global stocks, with net new money coming into both categories. The only area in which it has seen increased redemptions is among domestic bond funds. In the quarter ended Sept. 30, Franklin's fourth quarter, the firm said it received net new money of $1.8 billion, including sales and reinvested dividends. That was down from the net new cash of $2.7 billion in the second quarter, but an improvement over the year-earlier quarter, which had $1.6 billion in net outflows. Fidelity Investments wouldn't give precise figures for how much money is coming into its funds for October, saying only that it saw strong sales numbers for stock, bond and money-market funds. But, as a spokeswoman said of investors, "it's notable that they're coming back into equities."