NU Online News Service, June 26, 1:41 p.m. – U.S. stock and bond mutual funds attracted only $15 billion in net cash in May, down from $21 billion in April and $22 billion in May 2001, according to Financial Research Corp., Boston.

The May decline came after four months of relatively strong fund sales.

For the first five months of the year, including May, the industry has reported $116 billion in net cash flow, up from $75 billion for the same period in 2001, FRC reports.

The funds that attracted the most cash in May were government bond funds and international and global funds.

Government bond funds brought in $3.7 billion in May, up from $2.8 billion in April and $867 million in May 2001.

International and global funds attracted $2.4 billion, compared with $768 million in April and a net cash outflow of about $2 billion in May 2001.

Some of the hardest hit funds were domestic stock funds. They attracted only $4.9 billion in May, down from $14 billion in April and $18.5 billion in May 2001.

Lars Schuster, an analyst with FRC, says the slump in May stock fund sales was probably due partly to seasonal factors.

Investors often pump huge amounts of cash into funds in March and April because of tax deadlines, Schuster says.

But much of the decline also can be attributed to the shaky stock market and the recent charges of financial misreporting by executives of some major companies, Schuster says.

The news “has driven people into fixed-income funds and government and tax-free funds,” Schuster says. “It’s too bad, but with all the bad announcements, people are still on edge.”