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Stock Funds Bled in September: ICI

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Oct. 30, 2002 — Cash spilled out of stock mutual funds in September to the tune of about $16.1 billion, worse than in August, when investors pulled a net $3.7 billion out of U.S. equity funds, according to data from the Investment Company Institute (ICI).

Domestic stocks funds alone lost a net $14.5 billion in September, versus $561 million in August. Stock funds that invest overseas had outflows of $1.6 billion last month, versus $2.5 billion in August. Overall, September’s ouflows paled in comparison to the record net $52.6 billion pulled from stock funds in July of this year.

Bond funds — taxable and tax-free combined — had net inflows of $15.9 billion in September, compared with inflows of $17.4 billion in August, ICI said.

Money-market funds had outflows of $62.5 billion in September, versus inflows of $38.7 billion in August. Of that September outflow, funds that offered primarily to institutions recorded outflows of $51.8 billion. Funds offered primarily to individuals had outflows of $10.7 billion.

“This data is not at all surprising,” commented Louis Harvey, president, Dalbar Inc., a Boston-based mutual fund consultant. “I think the magnitude of the loss from equity funds indicates that investors’ confidence in the markets are continuing to deteriorate.”

Year to date through the end of September 2002, equity funds lost a net $18.7 billion, versus inflows $13.1 billion for the corresponding year-ago period.

Year to date through the end of September 2002, taxable bond funds had net inflows about $102.3 billion, versus $59.5 billion for the same period last year.

Overall, the combined assets of the nation’s mutual funds across all asset categories decreased by $329.2 billion to $6.06 trillion.


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