U.S. Stock Funds Disgorge $10 Billion
Investors yanked $9.99 billion from mutual funds focused on U.S. stocks in May, even as the market bobbed and weaved to higher ground.
The redemptions, vs. $1.71 inflow in April, were the most since February 2003, when investors pulled $10.3 billion from U.S. stock funds. In June '06, domestic stock funds waved goodbye to $9.5 billion amid a 15% summer slump in the Nasdaq.
What investors took from home funds, they gave to those aimed at foreign markets.
World equity funds saw an inflow of $11.54 billion in May. That continued a strong performance in April, when they got $16.5 billion in new money.
All told, stock funds brought in $1.55 billion in new money in May, down from $18.21 billion in April.
So far this year, investors have put $84 billion into stock funds. That's far less than the $121.3 billion they'd enlisted between January and May in 2006.
"In 2006, funds that invested overseas had net new cash flow of $148.5 billion, and funds that invested domestically had net cash flow of $11 billion," said ICI spokesman Chris Wloszczyna. "And that was a trend that was in place through much of 2005."
In May, the S&P 500 ended 3.26% higher and the Nasdaq composite gained 3.15%. The Dow Jones (NYSE:DJ) stood out with a 4.32% gain.
The MSCI EAFE index, which tracks stocks from Europe, Australasia and the Far East, edged up 2%.
U.S. equity funds tracked by Lipper on average climbed 3.82% in May, while world equity funds returned 3.46%. They returned 9.76% and 10.95%, respectively, for the year through May.
Investors put $2.02 billion into hybrid funds, which hold both stocks and bonds. That was roughly the same as the $2.55 billion inflow in April.
Mixed equity funds returned 2.09% in May and 6.54% year to date.
Bond Fund Flow
Bond funds won over $21.28 billion in May, up from $13.52 billion in April. Taxable bond funds swelled by $17.71 billion in May vs. $12.20 billion in April. Municipal bond funds got $3.58 billion in May -- more than double April's inflow of $1.33 billion.
Wloszczyna cites the growing popularity of target-date funds, which buy both bonds and stocks, as one of the driving forces behind the trend in bonds.
For the year to date, bond funds' inflow tally was $79.77 billion, not far behind stock funds' $84 billion and up from $21.01 billion in the year-earlier period.
Government bonds on average fell 0.77% in May, but have returned 1.33% year to date.
Money market funds -- which are more volatile, as institutions account for two-thirds of the action -- had an inflow of $57.57 billion in May vs. an outflow of $11.26 billion in April.
In all, investors poured $24.85 billion into long-term mutual funds in May. Total assets in all funds, including money market funds, increased by 3% to $11.396 trillion in May. The figure stood at $10.414 trillion on Dec. 31.
Fidelity took in $7.5 billion in new money in May. It's received $23.3 billion year to date. Contributions have slowed significantly from last year. Fidelity investors had plopped down $38 billion between January and May in 2006, says Fidelity spokesman Adam Banker.
Vanguard reported $8.3 billion in net flows in May vs. $6.7 billion in April.
American Funds' inflow into stock and bond funds amounted to $5.4 billion in May, according to Strategic Insight Mutual Fund Research and Consulting.
Barclays Global Investors pulled in $4.4 billion in net flows. Dodge & Cox pulled in $2.2 billion, BlackRock $2.2 billion, Franklin Templeton $2.0 billion and Schwab $1.6 billion, according to Strategic Insight data.
June Bloom?
Investors seemed to have a slightly better disposition toward U.S. stock funds in June. They put in $5.88 billion of new money, according to TrimTabs.com. But investors still favored world equity funds, which got an estimated $12.82 billion.
Last Updated: Sat, 30 Jun 2007 18:03:00
|
|
