Stock mutual funds last month recorded a net cash inflow of $243 million, the first gain in assets since November, as markets around the world rallied with the start of the war in Iraq.
Although the net inflow was minuscule compared with the funds’ total assets of $2.55 trillion, analysts said it may be more important for possibly signaling a turn in individual investors’ sentiment toward the equity market.
April is likely to see a net inflow of about $12 billion to stock funds if the trend through last week holds, according to estimates by TrimTabs.com in Santa Rosa, Calif.
“People jump on the rallies,” said Carl Wittnebert, research director at TrimTabs.com.
The March inflow data were reported Tuesday by the Investment Company Institute, the funds’ chief trade group.
Stock funds had net cash outflows of $11.1 billion in February, $466 million in January and $8.3 billion in December, according to the institute.
As investors turned more positive on stocks in March, they pumped less cash into bond funds, which have been attracting huge sums over the last year.
The net inflow to bond funds was $10.8 billion in March, down from $19.7 billion in February.
Money market funds had a net outflow of $32.3 billion in March, primarily because of withdrawals from funds used by institutional investors, the institute said.