Record $20.8 Billion Went Into Bond Mutual Funds in July

Concerned by declining stock prices and disgusted with low money-market rates, investors poured a record $20.8 billion into bond mutual funds in July, up 15% from June, the Investment Company Institute said Thursday.

Overall stock and bond mutual fund purchases rose to $32 billion in July from $28.3 billion in June, the institute said. That’s just shy of the record set earlier this year when markets were surging. In January, fund purchases were a staggering $32.6 billion.

Two-thirds of July’s increase came from purchases of bond funds, which advanced from $18 billion in June. U.S. government, municipal, global and “mixed” bond funds were most popular, while Government National Mortgage Assn., or Ginnie Mae, funds lagged.

Many fund companies say buying has waned this month in both stock and bond funds, as markets turned rocky.

In July, net new cash flow (a measure of new money entering the funds after accounting for redemptions and exchanges among funds) into stock funds totaled $6.8 billion, up from $4.6 billion in June.

For bond funds, the figure was a dramatic $11.8 billion in July, compared to $9 billion in June.