U.S. Mutual Fund Purchases Slow in June

Investors slowed their purchases of U.S. stock and bond mutual funds in June, although buying has picked up again in July along with the stock market, mutual fund companies said Thursday.

An estimated $18 billion was invested in equity funds last month, down from May, when $20.1 billion flowed into stock funds, the Investment Company Institute said.

As for bond funds, an estimated $2.5 billion was invested in June, compared with net purchases of $2.8 billion in May, said ICI, the mutual fund industry trade group.

The slowdown in June buying corresponds with a leveling of the market in the latter half of the month, when the Standard & Poor’s 500 index and the Dow Jones industrial average both slid about 1%.

Likewise, July buying is picking up after a boost in the Dow and S&P;, which are both up between 2% and 3% so far this month.

At the current pace, stock mutual fund sales would top $25 billion by the end of July, a level second only to January, said Carl Wittnebert, director of research at Trim Tabs Financial Services Inc. in Santa Rosa, Calif.

Wittnebert expects July flows to slow as the month goes on, because part of the recent surge comes from “pent-up demand in June.”

Bond investments attracted more money, however. The flow into balanced funds, which include bonds and stocks, jumped by 50% in June to $223 million, said Brian Maddis of Vanguard Group.