Dec. 24, 2003 — Overall mutual fund business remained healthy in November, but money flowed out of funds run by Janus Capital Group (JNS), Putnam Investments, and Alliance Cap Mgmt Holding L.P. (AC), which have been hurt by improper fund trading.
Stock funds and most bond funds took in money during the month, according to Financial Research Corp., which said stock and bond funds saw aggregate inflows of $16.9 billion.
Of that total, domestic stock funds netted $15.5 billion, and funds that invest in foreign stocks drew $3.6 billion. Corporate bond funds took in $1.6 billion, but municipal bond funds saw outflows of $1.4 billion, and assets in funds that invest in government bonds slid $2.4 billion.
Putnam’s assets dropped by $13 billion in November after declining by nearly $2.3 billion in October. The company last month agreed to settle charges with the Securities and Exchange Commission stemming from improper trading of its funds.
Assets at Janus fell by $2.5 billion in November after declining by about $2 billion a month earlier. The company said last week that it would refund $31.5 million to investors because of improper trading in its funds.
Alliance’s fund assets declined by $786 million last month. That followed a loss of $204 million in October.
Alliance this month agreed to cut its mutual fund management fees by 20% to pay a $250 million as part of a settlement with federal and New York State regulators over improper trading in the funds.
American Funds led all fund companies with inflows of $8.4 billion in November, and its Growth Fund of America/A (AGTHX) was the best selling fund, attracting an estimated $1.7 billion.
American Funds was trailed last month by Vanguard Group, the second-largest U.S. fund company, which attracted $5.6 billion. The largest domestic fund company, Fidelity Investments, took third place with inflows of about $3.3 billion.
Among the best selling funds, Growth Fund of America was followed by Vanguard Total Stock Market Index/Inv (VTSMX), which took in about $1 billion, and American Funds’ EuroPacific Growth Fund/A (AEPGX), which netted $943 million.