FUNDS STILL WAITING FOR BUYERS

The flow of money out of stock funds appears to be slowing down in the wake of Tuesday’s steep market plunge, mutual fund companies report. But investors don’t seem to be rushing to put new money into the market, as they did in the days following previous sharp pullbacks.

“What was striking in 1997 was that we had a sharp inflow the next day,” said Ivy McLemore, vice president of AIM Management Group Inc., referring to the market’s big dive on Oct. 27, 1997. “We saw a lot of people buying back on that dip. We haven’t heard of anything on those terms today.”

Trimtabs.com, a Santa Rosa research firm, estimates a net $90 million flowed into U.S. stock funds Wednesday. The firm considers that a negligible amount. Aggressive growth funds, the best proxy for small-cap funds, saw net redemptions of $375 million. Overall, “Individuals are sitting on the sidelines,” says Charles Biderman of Trimtabs.com.

In the days following October’s market plunge, a net $8.5 billion jumped back into stock funds, specifically from Oct. 29 through Nov. 7, 1997.

But Charles Schwab & Co. Vice President Tracey Gordon says she doesn’t think “it’s going to be like October, where you saw that immediate pop.”

Schwab reported that a net $182 million flowed out of its equity funds on Wednesday--even as blue chip stocks rebounded from Tuesday’s plunge.

According to the IBC Money Fund Report, a weekly trade publication, investors plowed $7.3 billion into money market funds in the week ended Tuesday. That’s more than twice the amount of money that was invested in money market funds in the week of Oct. 27.

While the $7.3 billion represents a major increase, IBC Managing Editor Peter Crane cautions against reading too much into the numbers. Wild swings frequently occur in money fund flows, especially at the beginning and end of each month.