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FRC: Mutual Fund Asset Flows Recovering

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NU Online News Service, Dec. 27, 3:09 p.m. – Financial Research Corp., Boston, says U.S. mutual fund asset flows recovered nicely in November.

Investors in “long-term” mutual funds– funds that invest in stocks and bonds — put in $15 billion more cash in November than they took out. That compares with a net inflow of $14 billion for October, and a net inflow of $3.2 billion for November 2000.

Cautious and uncertain investors put $50 billion more in money market funds in November than they took out. Net money market inflow increased from $38 billion in November 2000, when investors were more bullish on the market. But inflow has fallen from $76 billion in October, when investors and financial services companies were still reeling from the shock of the Sept. 11 attacks.

Funds of all kinds attracted $66 billion more in assets than they lost in November, down from $90 billion in November 2000, but up from $41 billion in October.

Financial Research follows 10 long-term mutual fund categories, ranging from high-yield bond funds to small blend bond funds.

Funds in the mid-cap growth category and the foreign stock category were the only funds that shrank in October.

In November, Financial Research says, funds in all 10 fund categories grew.

Net inflows for intermediate-term funds dropped sharply, to $671 million, from $3.2 billion, but the net flow of assets into high-yield bond funds, large blend funds and mid-cap growth funds increased sharply.