Fidelity Gauges Sales Off 25%; Other Stock Funds Enjoy Boom

Fidelity Investments, the nation’s No. 1 fund group, saw stock fund sales plunge an estimated 25% in April over March even as sales of U.S. stock mutual funds continued to boom along at near-record rates at other firms.

The April growth in sales at most mutual fund groups was bolstered by the underlying strength of the retirement market, the companies said.

Fidelity said equity fund sales were an estimated $2.3 billion in April, down from $3.1 billion in March.

Fidelity’s drop was in stark contrast to firms like Vanguard Group, T. Rowe Price Associates Inc., Massachusetts Financial Services Co., OppenheimerFunds Inc. and Scudder, Stevens & Clark Inc., which reported higher sales in April than March, in some cases better than any previous month.

T. Rowe Price said stock fund sales were up about 85% this month to $1.05 billion from last month’s level. Sales received a boost from investments in retirement accounts before the April 15 tax deadline, the company said.

“April has been the best sales month in our 36-year history,” said Tim Pitts, executive vice president of OppenheimerFunds in New York. “And that’s saying something considering how strong sales have been all year.”

A net $66.9 billion poured into the nation’s stock funds in the first quarter of 1996, or three times more than was invested in the first quarter of last year, the Investment Company Institute reported.

Stock fund sales totaled a net $20.5 billion in March, the third-highest on record since the industry’s trade association started tracking fund sales in the early 1960s. Only January and February were stronger sales months for stock funds, the ICI said.

Sales of stock funds are being driven by investments from individual retirement plans, as more Americans shift money to stock funds from investment alternatives like bank collective trust funds and insurance company guaranteed investment contracts, according to Optima Group Inc., an investment management consulting firm in Fairfield, Conn.

A net $1.8 billion was invested in bond funds in March, marking the ninth straight month that investors were net buyers of bond funds, the ICI reported. Bond fund sales were almost $7 billion in the first quarter.