Global Bucks Trend as Fund Flows Slow

For the second straight month, mutual fund companies are reporting a noticeable drop-off in new investment into stock funds.

Investors are on track to put about $12.5 billion in net new money into stock funds this month, according to Trimtabs.com, a Santa Rosa research firm. That compares with the $16.4 billion they invested in May and $25.8 billion in April, according to the Investment Company Institute, the fund industry’s chief trade group.

But the slowdown isn’t limited to stock funds. Through May, net new investments into all forms of mutual funds--stock, bond and money market--were down 44% year to date versus the same period last year.

This month’s one bright spot has been international stock funds. Despite a slowdown in international fund flows in the last week, investors have been putting far more new money to work in these funds than they did in May.

Trimtabs expects more than $3 billion to flow into international stock funds in June. That’s down from earlier estimates but five times greater than May’s total.

Though market leadership has broadened to small stocks as well as international equities, small-stock funds continue to have problems attracting new money. Trimtabs estimates that investors are pulling slightly more money out of small-company stock funds this month than they’re putting in.