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Bond Funds Leak Assets

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Oct. 30, 2003 — Investors continued to move out of bond funds and into stock funds last month, according to Financial Research Corp.

Bond funds suffered outflows of $4.7 billion in September, marking the third consecutive month their sales have dropped off, FRC said. Meanwhile, domestic stock funds attracted $23.6 billion and international and global funds netted $1.9 billion.

For the sixth straight month, American Funds and its Growth Fund of America/A (AGTHX) were the best selling fund complex and individual fund, taking in $6.6 billion and $1.4 billion, respectively.

Continuing a recent trend, three of American’s other offerings were among the five best selling funds. Third place was held by Income Fund of America/A (AMECX), which took in $970 million. It was followed by Capital Income Builder Fund/A (CAIBX), which netted $851 million, and Washington Mutual Investors Fund/A (AWSHX), which saw inflows of $774 million.

The second best selling fund with inflows of about $1.1 billion was Dodge & Cox Stock Fund (DODGX).

American was trailed by Vanguard Group, which attracted $3.2 billion; Fidelity Investments , which took in $2.5 billion; Dodge & Cox, which netted $1.7 billion; and Pacific Investment Management Co., known as PIMCO, which saw inflows of $1.3 billion.

Among the 25 largest fund groups, Janus Capital Group (JNS), one of several firms that have been hurt by the mutual fund trading scandal, suffered the the greatest outflows last month, hemorrhaging $2.7 billion.

Putnam Investments, which this week was hit with lawsuits by federal and state regulators charging it with securities fraud in connection with the scandal, sustained outflows of $731 million last month.

Other losers among the largest complexes included AIM Distributors Inc., which saw outflows of $1.1 billion in September.

Morgan Stanley Investment Advisors suffered outflows of $518 million in September, and American Express funds saw outflows of $436 million last month.