Increased Stock-Fund Buying In April, Adding to March Momentum
April 30 1999
By PUI-WING TAM
Staff Reporter of THE WALL STREET JOURNAL
Mutual-fund investors stepped up their purchases of stock funds during
April, say several fund companies, adding to the flood of new money that
began flowing back into stock funds in March.
Last month, individuals shoveled $12.73
billion into stock-mutual funds, according to
figures released Thursday by the Investment
Company Institute, a mutual-fund trade
group in Washington. The March figure is up significantly from February,
when investors put a relatively meager $711.9 million into stock funds.
Indeed, total new buying by investors in 1999's first quarter was down
roughly half from 1998's first quarter, an ICI spokesman says.
But customers this month appear to be building on the March momentum,
increasing the amounts they are investing in stock funds. At Vanguard
Group, Malvern, Pa., $5.1 billion has gone into stock funds this month, up
from $3.6 billion in March, says a spokesman. At Charles Schwab Corp.,
San Francisco, customers have poured $1.175 billion into stock funds thus
far in April, up from a modest $180 million in March, according to a
spokesman.
At Fidelity Investments, Boston, stock funds have received $3.9 billion in
new customer cash, up 77% from March's $2.2 billion, a spokesman says.
Meanwhile, at T. Rowe Price Associates, Baltimore, the amount of new
cash flowing into U.S.-stock funds this month "has exceeded total inflows
into [U.S.]-stock funds for the first quarter," says Steve Norwitz, a T.
Rowe spokesman. He declined to reveal specific numbers.
Among sectors benefiting from the gusher of new cash: international-stock
funds. Such funds generally have been unpopular for well over a year as a
result of the economic and currency crises that hit Asia, Russia and Brazil.
But Schwab says $116 million has poured into international funds this
month, up from net withdrawals of $143 million in March. T. Rowe Price
adds that Japan and Asian stock funds, in particular, are drawing investor
attention.
Sales have been less robust for bond funds and money-market funds,
however. Although the ICI reports that bond funds received net new
investor cash of $6.44 billion in March, up slightly from $4.37 billion in
February, mutual-fund firms say interest in bond funds has waned this
month. At Vanguard, for instance, $1.16 billion has flowed into bond funds
in April, down from $1.66 billion in March. At Fidelity, bond-fund
purchases remain steady at about $300 million.
Money-market funds, meanwhile, have seen large withdrawals. In March,
the sector experienced withdrawals totaling $8.23 billion, according to the
ICI. This month, investors are continuing to pull out. At Vanguard,
customers pulled $1 billion from money-market funds in April, down from
purchases of $1.8 billion in March. Fidelity also experienced slight
withdrawals from money-market funds but declined to reveal numbers.
Ed Giltenan, a spokesman at T. Rowe Price, attributes the money-market
withdrawals to the tax season. "You tend to see people using their
money-market checkwriting privileges to pay taxes in April, so that
influences flows," he says. Mr. Giltenan adds that the stunning rise in the
stock market continues to attract investors away from bond and
money-market funds, prompting them to "redeploy their cash into stock
funds."
-- John Hechinger contributed to this article. |
