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April 02, 2004 at 07:00 PM
Mutual fund investors withdrew more than a net $40 billion last year from fund companies caught up in the market timing scandal, the fund industry’s largest trade group said in a study.
Just as other fund companies saw their sales improve sharply last year, firms named in the scandal experienced net redemptions from their stock and bond funds averaging $10.7 billion in each of the last four months of 2003, according to the Investment Company Institute. Those companies had reported monthly net withdrawals totaling an average of $1 billion for the first eight months of the year, before the first report of the regulatory investigations in early September.
Firms not cited by regulators in various allegations of share trading abuses saw their monthly flow of new money rise to an average of $28.9 billion during each of the last four months of the year, up from $18.9 billion a month between January and August.
