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.

Bond funds had an inflow of $496 million in January, compared with an outflow of $3.25 billion in December. Taxable bond funds had an inflow of $718 million. Municipal bond funds had an outflow of $222 million.

Money-market funds had a net outflow of $19.77 billion in January, compared with an outflow of $22.62 billion in December. Funds offered primarily to institutions had an outflow of $10.15 billion in January. Funds offered primarily to individuals had an outflow of $9.62 billion in January.

Overall, the combined assets of the nation’s mutual funds increased by $122.3 billion, or 1.6%, to $7.54 trillion in January, a record level for the industry.