April 29, 2004 — Net new cash into stock funds dropped in March as they took in $15.8 billion, versus $26.2 billion in February, according to data from the Investment Company Institute.

Among stock funds, the ICI said aggressive growth funds had an outflow of $1.08 billion, versus an inflow of $1.68 billion in February. However, all other stock fund categories recorded inflows.

Year to date through the end of March, stock funds have received $85.0 billion in net new cash, versus a net outflow of $11.1 for the comparable period in 2003.

Long-term funds — that is, stock, bond, and hybrid funds — collectively had a net inflow of $28.28 billion in March, compared with an inflow of $32.75 billion in February.

Bond funds grew richer in March, taking in $7.66 billion versus $1.52 billion in February. Taxable bond funds had an inflow of $7.39 billion in March, while municipal bond funds had an inflow of $264 million.

Money market funds had outflows of $10.86 billion in March, versus outflows of $20.96 billion in February. Funds offered primarily to institutions had an outflow of $410 million in March. Funds offered primarily to individuals had an outflow of $10.45 billion in March.

“The decline in net new cash into stock funds is a clear indication of the weak markets we have seen over the past couple months,” said Louis Harvey, president of Dalbar Inc., a Boston-based mutual fund consultant. “The heavy inflows we witnessed in the first two months of the year were apparently an illustration of investors chasing the high returns of 2003. But, by now, it appears the sheen has worn off with many investors.”

Overall, the combined assets of the nation’s mutual funds decreased by $6.3 billion, or 0.1%, to $7.63 trillion in March.

Net New Cash Flow of Long-Term Funds (Bil.$)

*revised

MUTUAL FUNDS March 2004 February 2004* YTD 2004 YTD 2003*
New Sales 90.66 82.28 277.55 182.34
Redemptions -73.07 -58.42 -200.53 -180.13
Exchanges In 15.55 14.19 51.85 62.23
Exchanges Out -17.30 -11.83 -43.83 -75.55
Net New Cash Flow 15.84 26.21 85.05 -11.11
TAXABLE BOND MUTUAL FUNDS March 2004 February 2004* YTD 2004 YTD 2003*
New Sales 32.23 26.62 88.54 100.65
Redemptions -25.18 -24.40 -77.06 -66.25
Exchanges In 5.47 4.09 14.34 25.82
Exchanges Out -5.13 -5.38 -17.60 -19.01
Net New Cash Flow 7.39 0.93 8.23 41.21
MUNICIPAL BOND MUTUAL FUNDS March 2004 February 2004* YTD 2004 YTD 2003*
New Sales 6.12 5.01 16.24 16.38
Redemptions -5.73 -4.42 -15.23 -14.07
Exchanges In 0.87 0.79 2.73 4.28
Exchanges Out -1.00 -0.79 -3.09 -4.80
Net New Cash Flow 0.26 0.59 0.63 1.79
HYBRID MUTUAL FUNDS March 2004 February 2004* YTD 2004 YTD 2003*
New Sales 11.68 10.08 33.68 20.01
Redemptions -7.26 -5.58 -20.18 -17.72
Exchanges In 1.61 1.52 5.35 4.00
Exchanges Out -1.25 -0.99 -3.53 -4.24
Net New Cash Flow 4.78 5.02 15.33 2.06

*revised