Money Keeps Marching Into Funds

Long-term U.S. mutual funds attracted a record net $37.5 billion in March as investors pumped money into retirement accounts.

An estimated net $27.5 billion went into stock funds, up from $24.2 billion in February, the Investment Company Institute said Thursday. An estimated net $7.5 billion was added to bond funds, versus $6.3 billion in February. So-called hybrid funds attracted $2.5 billion in March, ICI said.

The total beat the $32.4 billion that went into funds in February and the previous monthly record of $32.7 billion in January 1996.

For stock funds alone, ICI estimates March was the best month since January 1997. If the actual number stays at $27.5 billion, March will rank as the third-best month ever for stock funds.

“March was a ‘Titanic’ month for the mutual fund industry,” said Gavin Quill, director of business analysis at Scudder Kemper Investments Inc.

The rate of fund buying has been even higher so far this month, spurred by continuing demand for the new Roth individual retirement account, fund companies said.

“The Roth IRA is boosting our business and contributing to the strong net inflows that we’re seeing,” said Steven Norwitz, vice president at Baltimore-based T. Rowe Price Associates Inc.

Vanguard Group, the second-biggest U.S. fund company, reported that a net $3.5 billion went into its U.S. stock funds in March, up from $2.8 billion in February. March’s monthly inflow was the highest ever for Vanguard.

Fidelity Investments said $2 billion in net new cash flowed into its stock funds in March, and that $1 billion has flowed in so far in April.