Stock Fund Purchases on Record Pace in January

Investors have been buying stock mutual funds at a record clip this month, providing more fodder for Wall Street’s bull market, fund companies say.

Meanwhile, the funds’ chief trade group on Thursday released 1995 industry data that show stock fund cash inflows just below 1993’s record level.

The Investment Co. Institute said net new cash flow into stock funds totaled $128.9 billion last year, up from $119.3 billion in 1994 but below 1993’s $129.6 billion.

However, the 1993 total was swollen by heavy purchases of foreign-stock funds. For domestic-only stock funds, 1995 saw record purchases, the ICI said.

Net new cash flow is fund purchases minus redemptions, reinvested dividends and exchanges among funds in the same family.

While investors’ hunger for stock funds was robust last year, many continued to shy away from bond funds, which saw a net cash outflow of $4.1 billion in 1995.

In December alone, however, bond funds’ net new cash flow was a positive $845 million. Stock funds’ December inflow was $17 billion, up from $14.3 billion in November.

Heavy purchases of stock funds this month suggest the final tally will top the record $18.4 billion of January 1994. Many of the nation’s biggest fund companies, including Vanguard Group, Putnam Investments, T. Rowe Price Associates and AIM Management, say stock fund purchases are at all-time highs this month.

Investors continue to buy domestic funds, but foreign-stock funds also are resurging in popularity, fund companies say.