Investors Pour Money Into Stock Funds, Reverse Trend

U.S. stock mutual fund investors poured $3.56 billion into mutual funds in the six days ended Christmas Eve, reversing a three-week pullout.

The net new fund inflows, which excluded reinvested dividends, were the largest since Nov. 20 and took place in an abbreviated reporting period, according to estimates by AMG Data Services, an Arcata, Calif.-based group that tracks money flows.

About two-thirds of the new investment was because of a normal, year-end push by consumers to add to mutual funds after receiving dividend payouts. There were signs, such as higher investments in technology stock funds, that people are getting more aggressive after a monthlong lull.

“There’s some renewed, positive investor sentiment,” said Robert Alder, AMG’s president.

The surge capped a record year, as small investors pumped $208 billion into stock funds in the first 11 months of 1996, easily eclipsing the previous full-year high of $129.6 billion in 1993, according to the Investment Company Institute, an industry trade group.

Many analysts say the inflow of money into mutual funds is a catalyst for a stock market rally that has pushed the Dow Jones industrial average up 27% since Jan. 1.

The jump this week in stock mutual fund assets followed three weeks when investors pulled money out of funds.

With this week’s new investments, however, December is on track to be another month of net inflows. There hasn’t been a month of net redemptions from stock funds since September 1990.