Investors Look Overseas

Cash into stock funds narrowed in August

Cash flow into the nation's stock mutual funds moderated in the month of August, according to data released today by the Investment Company Institute (ICI). Equity portfolios took in $6.31 billion during August, following an inflow of $9.95 billion in July.

The data reveals that U.S. investors poured more money overseas, while taking cash out of domestic stock markets. The ICI said that world equity stock funds posted an inflow of $8.22 billion in August, almost double the $4.63 billion inflow posted in July. Funds that invest primarily in the U.S. had an outflow of $1.92 billion in August, compared with an inflow of $5.32 billion in July.

Year-to-date through the end of July, stock funds have received $89.77 billion in net new cash, well below the $128.69 billion figure recorded in the year-ago period.

Long-term funds -- stock, bond, and hybrid funds -- collectively had a net inflow of $15.39 billion in August, compared with a net inflow of $18.68 billion in July.

Bond funds remained about the same. ICI said that fixed-income portfolios had an inflow of $7.32 billion in August, compared with an inflow of $7.27 billion in July. Taxable bond funds had an inflow of $5.82 billion in August, compared with an inflow of $5.58 billion in July. Municipal bond funds had an inflow of $1.49 billion in August, compared with an inflow of $1.69 billion in July.

Money-market funds had an inflow of $32.49 billion in August, compared with an inflow of $13.48 billion in July. Of those figures, funds offered primarily to institutions had an inflow of $26.37 billion. Funds offered primarily to individuals had an inflow of $6.12 billion

Overall, the combined assets of the nation's mutual funds increased by $71.0 billion, or 0.8%, to $8.518 trillion in August.

NET NEW CASH FLOW OF LONG-TERM FUNDS (BIL.$)

August 2005

July 2005*

YTD 2005

YTD 2004*

Stock Mutual Funds

6.31

9.95

89.77

128.69

Taxable Bond Mutual Funds

5.82

5.58

23.50

-6.94

Municipal Bond Mutual Funds

1.49

1.69

5.72

-12.83

Hybrid Mutual Funds

1.77

1.45

23.49

30.14

InvestmentAdvisor.com has more mutual fund news from Standard & Poor's available here.
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