Inflows Increase to Stock Funds

Investors pumped more money into stock mutual funds in March than in February, and their tastes shifted notably toward U.S. stock funds after a long preference for foreign offerings, a trade group said Thursday.

Net cash flow into all stock funds was $34 billion last month, up from $27.4 billion in February and the largest monthly inflow since January 2004, according to the Investment Company Institute. The March inflow was the sixth-largest ever.

Research firm Lipper Inc., in a report this week, noted that it was rare for March fund inflows to exceed February activity. But stock markets have been robust worldwide this year, and more investors are jumping aboard.

U.S. investors turned much more bullish on domestic funds in March. U.S. equity funds took in a net $15.6 billion last month, nearly double the $8.3-billion inflow in February.

Foreign funds took in $18.5 billion, continuing the trend of the last year that has seen more money flow to foreign funds than U.S. funds. But the March inflow was a decline from the $19.1-billion inflow of February.

For the first quarter of 2006, inflows to U.S. and foreign funds combined totaled $93 billion, nearly double the pace of 2005.

Bond funds had an inflow of $5.2 billion in March, down from $8.7 billion in February.

Money market funds had an outflow of $9.42 billion, after February’s inflow of $5.45 billion.

The fund industry now manages $9.4 trillion in all.