September Inflow Into U.S. Funds Soars
Net inflows to U.S. stock mutual funds were $25.8 billion in September, up sharply from $14.0 billion in August, a mutual fund industry group said Thursday.
The fund group, the Investment Company Institute, had previously estimated September stock inflows at $21.5 billion and August inflows at $13.9 billion.
For the first nine months of 1997, ICI said the flow to stock mutual funds totaled $176.8 billion, down from $179.1 billion in the first nine months of 1996.
Bond and income funds in September saw an inflow of $3.6 billion, off from $7.1 billion in August. Washington-based ICI said the August inflow, which included $3.4 billion in conversions of bank trust assets to mutual funds, was the largest since January 1994, when it totaled $11.0 billion.
ICI revised its September bond and income fund flows down from a previously estimated $4.0 billion.
Net inflows to bond and income funds in the first nine months of 1997 totaled $24.1 billion, compared with $9.4 billion in the same period last year, ICI said.
ICI also said money market funds had a net outflow of $7.8 billion in September, contrasted with an inflow in August of $30.2 billion.
Meanwhile, Trim Tabs Financial Services, which also tracks fund flows, said Thursday so far in October that U.S. mutual fund investors were pulling cash from international stock funds and slowing purchases of domestic stock funds amid concern about the Southeast Asian market rout that spread globally.
A net $2.2 billion was redeemed from international equity funds this month. That’s the first time since December 1990--just before the Persian Gulf War--that money left these funds in a one-month period, Trim Tabs said.
“There’s a lot of panic-selling going on in the international markets,” said Thomas Herzfeld, president of Thomas J. Herzfeld & Co., a Miami investment advisory firm.
Several Southeast Asian funds lost more than 25% of their value in the last month, including Morgan Stanley Asian Fund, Fidelity Hong Kong and China Fund and Eaton Vance China Fund. Other funds that concentrate assets in emerging markets debt, including Alliance Global Dollar Government Fund, Phoenix Emerging Markets Bond Fund and T. Rowe Price Emerging Markets Bond Fund, fell more than 10% the past two weeks.
“Outside the U.S. there haven’t been many safe havens for stock fund investors,” said Gavin Quill, marketing vice president at Scudder, Stevens & Clark Inc. in Boston.
Fund companies, including Fidelity Investments, T. Rowe Price Associates Inc., Charles Schwab Corp. and Scudder, reported net withdrawals from international funds.
About $205 million was pulled from Fidelity’s international funds this month, representing about 1.8% of these funds’ assets, according to Alpha Equity Research Inc., which tracks the biggest U.S. fund group.
San Francisco-based Charles Schwab Corp. reported that almost $225 million was withdrawn from international equities funds sold through the firm’s MarketPlace service.
