April 29, 2003 — Stock funds received a modest inflow of $243 million in March, after suffering an outflow of $11.1 billion in the prior month, according to the Investment Company Institute.
The ICI noted that domestic equity funds had an inflow of $1.6 billion in March, compared with an outflow of $10.6 billion in February. Stock funds that invest overseas had an outflow of $1.3 billion in March, compared with an outflow of $509 million in February.
Bond funds had an inflow of $10.8 billion in March, compared with an inflow of $19.7 billion in February.
Money-market funds had an outflow of $32.3 billion in March, compared with an outflow of $39.6 billion in February. Funds offered primarily to institutions had an outflow of $30.4 billion in March, while funds offered primarily to individuals had an outflow of $1.9 billion for the month.
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“The hold that the money-market funds has had on investors may be easing up now, and more people have been attracted to the modest rally in the stock markets,” said Louis Harvey, president, Dalbar Inc., a Boston-based mutual fund consulting firm.
On the basis of better-than-expected first quarter corporate earnings, somewhat higher consumer confidence and the winding down of the war in Iraq, “there has definitely been a significant change in investors’ attitudes toward the stock market,” Harvey said. “Higher confidence in the equity markets will, of course, lead to increased cash flows into equity funds.”
Year to date through March, equity funds have suffered an outflow of $11.1 billion, compared with an inflow of $53.7 billion at this time last year.