Mutual Fund Purchases Jump 14.7% in December

Flush with holiday cheer, investors pumped a net $16.01 billion into mutual funds in December, pushing the American mutual fund industry’s total to $2.07 trillion.

December’s net purchases of stock and bond mutual funds increased 14.7% from November 1995, when mutual funds gained $13.95 billion, according to the Investment Co. Institute, a Washington-based mutual fund association. In December 1994, funds lost a net $2.75 billion.

The figures represent new cash, excluding reinvested dividends and after redemptions.

Stock funds gained $14.49 billion, up 23% from November purchases. Bond funds gained $1.52 billion, down 31% from November’s $2.21-billion intake.

January looks even hotter for equity fund cash flows, industry observers said. In the first three weeks of 1996, investors pumped a whopping $16.12 billion into equity funds and $3.5 billion into taxable bond funds, according to AMG Data Services Inc.

January is always a top month for mutual fund cash flows because of deposits of year-end bonus checks and contributions to individual retirement accounts, mutual fund executives said.

But this January is exceptional. And AMG President Bob Adler said international funds are the biggest surprise winners.

“Many people are now investing allocated proportions to international funds,” he said.

International funds gained $3.4 billion through Jan. 17, AMG said.