Cash Into Stock Funds Surges in January: ICI

Cash flows into the nation's stock mutual funds roared ahead in the first month of the new year, according to data released by the Investment Company Institute (ICI). U.S. stock funds took in $31.79 billion in net new cash for the month, versus an inflow of $9.82 billion in December 2005.

Overall, the combined assets of the nation's mutual funds increased by $287.5 billion, or 3.2%, to $9.193 trillion in January, marking the first time that mutual fund assets crossed the $9-trillion barrier.

The January 2006 inflow was about triple the intake of $10.11 billion from the year-ago period.

Both international and domestic stock portfolios received significantly higher inflows in January. World equity funds -- U.S. funds that invest primarily overseas -- posted an inflow of of $23.55 billion in January, versus an inflow of $12.31 billion in December. Funds that invest primarily in the U.S. had an inflow of $8.24 billion in January, versus an outflow of $2.49 billion in December.

Long-term funds -- stock, bond, and hybrid funds -- had a net inflow of $39.82 billion in January, versus a net inflow of $6.22 billion in December.

Fixed income portfolios were not ignored either. Bond funds had an inflow of $8.14 billion in January, compared with an outflow of $2.83 billion in December. Taxable bond funds had an inflow of $6.08 billion in January, versus an outflow of $1.62 billion in December. Municipal bond funds had an inflow of $2.06 billion in January, compared with an outflow of $1.21 billion in December.

Money market funds had an outflow of $3.95 billion in January, compared with an inflow of $46.97 billion in December. Funds offered primarily to institutions had an outflow of $8.86 billion. Funds offered primarily to individuals had an inflow of $4.91 billion.

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

January 2006

December 2005*

YTD 2006

YTD 2005*

Stock Mutual Funds

31.79

9.82

31.79

10.11

Taxable Bond Mutual Funds

6.08

-1.62

6.08

3.82

Municipal Bond Mutual Funds

2.06

-1.21

2.06

0.86

Hybrid Mutual Funds

-0.11

-0.77

-0.11

4.95

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

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