Stock Fund Inflows Slow in October

The pace of stock fund buying fell about 25% in October, as inflows fell sharply at some of America’s biggest mutual fund companies, including Fidelity Investments.

But early indications for this month show stock fund inflows returning to the robust rates of earlier this year. Analysts speculated that the October figures were low because of a general hesitance to invest just before the elections.

An estimated $13 billion was invested in stock funds in October, down from $17.4 billion in September, the Investment Company Institute said Wednesday. An estimated $500 million was withdrawn from long-term bond funds in October, marking the fourth month in the last six that money left these funds, the industry trade group said.

However, equity mutual funds sold in the U.S. attracted cash at close to a record pace in the days following last week’s elections, according to another research group that tracks fund inflows.

An estimated $2.5 billion a day flowed into stock funds in the three days after Nov. 5, up from $300 million a day in the weeks before the elections, said Charles Biderman, publisher of Mutual Fund Trim Tabs in Santa Rosa, Calif.

“Apparently, a lot of individual investors were concerned the Democrats would sweep the House and the Senate,” Biderman said.

The surge of new investment in stock funds helped fuel a rise in U.S. markets in recent days.

A record $192.19 billion flowed into stock funds in the first 10 months of 1996, eclipsing the previous full-year high of $129.6 billion, the ICI reported. The monthly record was set in January, when $28.9 billion was invested.