January 4, 2005

Net New Cash Into Stock Funds Rebounds in November: ICI

Dec. 30, 2004 -- Cash flowed into stock funds at almost triple the pace in November compared to the prior month, according to data released today by the Investment Company Institute. Equity portfolios took in about $21.4 billion in net new cash in November, versus inflows of $7.2 billion in October.

John Collins, a spokesman for ICI, said that the dramatic increase in cash flow into equity funds may be explained by several factors, including strong market performance during November, as well as investors' willingness to put money back into the market following the re-election of President Bush, which lifted pre-election uncertainties.

Year-to-date through November, stock funds have experienced a net inflow of $167.4 billion, ahead of the $138.1 billion recorded for the year-ago period.

The ICI said that among stock funds, world equity funds posted an inflow of $8.5 billion in November, versus an inflow of $4.9 billion in October. Funds that invest primarily in the U.S. had an inflow of $12.9 billion in November, compared with an inflow of $2.3 billion in October.

Bond funds had an inflow of $2.0 billion in November, compared with an inflow of $3.6 billion in October. Taxable bond funds had an inflow of $2.0 billion in November, while municipal bond funds had an outflow of $6 million in November.

Long-term funds -- i.e., stock, bond, and hybrid funds -- collectively had a net inflow of $27.5 billion in November, nearly double the net inflow of $14.2 billion in October. For the year (through November), long-term funds have posted a net inflow of $196.6 billion, compared with a net inflow of $201.3 billion in the same period in 2003.

Money market funds had a net inflow of $27.5 billion in November, compared with an outflow of $14.3 billion in October. Funds offered primarily to institutions had an inflow of $31.3 billion. Funds offered primarily to individuals had an outflow of $3.8 billion.

Overall, the combined assets of the nation's mutual funds increased by $273.7 billion, or 3.6%, to $7.92 trillion in November.

STOCK MUTUAL FUNDS Amounts in Billion $
November 2004 October 2004* YTD 2004 YTD 2003*
New Sales 83.51 67.47 857.16 763.06
Redemptions -64.25 -59.07 -695.05 -638.15
Exchanges In 17.03 12.99 155.76 221.97
Exchanges Out -14.95 -14.19 -150.46 -208.79
Net New Cash Flow 21.35 7.20 167.41 138.10
TAXABLE BOND MUTUAL FUNDS
November 2004 October 2004* YTD 2004 YTD 2003*
New Sales 24.09 21.68 267.47 333.64
Redemptions -22.27 -18.63 -257.22 -280.92
Exchanges In 3.88 3.34 42.52 71.91
Exchanges Out -3.69 -2.82 -51.40 -84.64
Net New Cash Flow 2.00 3.57 1.37 39.99
MUNICIPAL BOND MUTUAL FUNDS
November 2004 October 2004* YTD 2004 YTD 2003*
New Sales 4.23 3.74 45.98 57.11
Redemptions -4.06 -3.73 -54.86 -58.29
Exchanges In 0.64 0.56 8.03 13.57
Exchanges Out -0.83 -0.57 -11.89 -18.14
Net New Cash Flow 0 0 -12.74 -5.76
HYBRID MUTUAL FUNDS
November 2004 October 2004* YTD 2004 YTD 2003*
New Sales 10.15 8.74 105.01 83.39
Redemptions -6.32 -5.48 -68.02 -58.68
Exchanges In 1.38 1.09 14.88 16.68
Exchanges Out -1.07 -0.89 -11.28 -12.44
Net New Cash Flow 4.14 3.46 40.60 28.95

* Revised

Contact Bob Keane with questions or comments at:bkeane@investmentadvisor.com.

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