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Mutual Fund Sales Decline Reflects Inflation Concern : Investing: Totals show recent boom is waning. Banks will likely attract more of savers’ money.

From Bloomberg Business News

Sales of stock and bond and income mutual funds sank 15% in February from the previous month, the mutual fund industry’s trade group said.

Fund sales fell to $48.1 billion from $56.9 billion in January, the Investment Company Institute reported. The February figure was 35% above the $35.6 billion in sales made in February, 1993.

The figures seemed to be further evidence that an almost continuous explosion in mutual funds over the last year or so won’t last through 1994. Many small and institutional investors are more concerned about the economy and inflation than they were a year ago.

In addition, investors holding bank certificates of deposit won’t be so quick to rush into equity and bond mutual funds as money-market interest rates rise.

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Sales of stock mutual funds totaled $26.1 billion in February. That’s 12% less than the $29.6 billion of January, and 76% above the $14.8 billion of February, 1993. International funds, with sales of $6.2 billion, led all fund categories.

February sales of bond and income mutual funds totaled $22 billion. That’s 19% less than the $27.2 billion of January and 5.8% more than the $20.8 billion in February, 1993.

Total sales represent the value of new shares purchased, including reinvested dividends. Total sales numbers do not include exchanges from one fund to another within the same fund group. Nor do they account for redemptions of shares.

The new sales, excluding reinvested dividends, totaled $46.1 billion in February, down 15% from $54.1 billion in January and up 27% from $33.8 billion in February, 1993.

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New stock-fund sales were $26 billion, down 11% from $29.1 billion in January and up 77% from $14.7 billion in February, 1993.

The bond and income funds’ new sales sank 20% to $20.1 billion from $25 billion in January. The figure rose 4.7% from $19.2 billion in February, 1993.

Redemptions, or liquidations of shares by fund holders, totaled $26.2 billion in February, up 1.6% from $25.8 billion in January and up 7.2% from $15.2 billion in February, 1993.

Stock fund redemptions slipped 4% to $11.7 billion in February, from $12.1 billion in January. The latest figure rose 95% from $6 billion in February, 1993.

Bond and income fund redemptions advanced to $14.5 billion in February, up 5.8% from $13.7 billion in January and up 58% from $9.2 billion in February, 1993.


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