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March 05, 2004 at 07:00 PM
Feb. 27, 2003 — Stock funds posted a net new cash inflow of $43.76 billion in January, compared with the $14.18 billion inflow recorded in December, according to the Investment Company Institute.
The January cash flow was the third largest monthly inflow to stock funds, ICI noted. The two largest one-month inflows were $55.61 billion in February 2000 and $44.54 billion in January 2000.
The sharp increase of money going into stock funds was a “predictable phenomenon,” said Louis Harvey, president of Dalbar Inc., a Boston-based mutual fund consulting firm. “When the strong performance figures for equities for 2003 came out, it created a large release of cash from investors. Thus, these flows are primarily sales-driven, as advisors showed their clients the big returns stocks delivered last year.”
ICI said that long-term funds — i.e., stock, bond, and hybrid funds — collectively had a net inflow of $49.78 billion in January, compared with an inflow of $14.56 billion in December.
