Stock Fund Inflows Rose in June
Cash inflows to equity funds remain respectable despite ongoing stock market volatility, data show.
Investors pumped $22.4 billion in net new cash into stock funds in June, up from $17 billion in May, an industry trade group said Monday. As for July, many fund companies say inflows were solid despite a 5% drop in the technology-dominated Nasdaq composite index and a smaller dip in the blue-chip Standard & Poor’s 500.
TrimTabs.com, a Santa Rosa, Calif.-based firm that unofficially tracks fund flows, estimated a net inflow for July of $18 billion to $20 billion for stock funds, not far off June’s pace. But July was the weakest month for tech fund flows since April, TrimTabs added.
In its June report, the Investment Company Institute said bond funds had their first net inflows since July 1999, with taxable bond funds taking in $1.64 billion. But municipal bond funds saw redemptions of $1.15 billion. Hybrid funds, which hold stocks and bonds, had an outflow of $2.2 billion.
Janus Funds, Vanguard Group, Fidelity Investments, American Century Investments and Invesco Funds Group said equity fund flows for July were positive even though the major indexes turned negative. They also reported net inflows for their bond funds, except American Century, which had no July bond figures available.
T. Rowe Price Associates said flows were negative for stock and bond funds in July, but spokesman Steven Norwitz attributed that mostly to mergers involving companies whose 401(k) plans it manages, rather than nervousness among individual investors. “There’s also a bit of the usual summer doldrums at work,” he added.
The fund industry may see doldrums continue this month. TrimTabs President Charles Biderman noted that August is historically the slowest month for equity flows, averaging $8 billion since 1995 amid generally weak market performance.
Vanguard estimated July inflows of $2 billion for its equity funds, its highest tally this year, versus $900 million in June. Its Total Stock Market Index fund, which tracks the Wilshire 5,000, has drawn increasing investor interest, said spokesman Brian Mattes.
Janus also reported a net $2-billion inflow for its equity funds, a strong showing though far off the first quarter’s record level.
Fidelity said equity funds took in a net $500 million, versus $300 million in June.
The fund companies said several offerings focusing on small- and mid-cap stocks were among July’s best-sellers, including Invesco Dynamics, a mid-cap growth fund; Invesco Small Company Growth; T. Rowe Price Small-Cap Stock; and Fidelity Mid-Cap Stock.
That could bode well for the small- and mid-cap stock sectors, which still are outperforming blue-chip stocks for the year to date.
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Stock Fund Inflows
The net cash inflow of $22.4 billion into the nation’s equity mutual funds in June surpassed May’s total but remained far down from Febuary’s record. Monthly inflows:
