Oct. 28, 2004 — Money going into stock funds bounced back in September as equity portfolios raked in about $10.1 billion in net new cash, versus inflows of only $1.2 billion in the prior month, according to the Investment Company Institute.

Among equity funds, funds that invest primarily overseas posted an inflow of $4.1 billion in September, compared to $2.3 billion in August. Funds that invest primarily in the U.S. had an inflow of $6.0 billion in September, compared with an outflow of $1.1 billion in August.

The ICI also said hybrid funds, which hold both stocks and bonds, posted a $3.0 billion net inflow in September, compared with an inflow of $2.6 billion in August.

Year-to-date through September, equity funds have gained $138.8 billion in net new cash, well ahead the $98.1 billion figure from the year-ago period.

Long-term funds — i.e., stock, bond, and hybrid funds — collectively had net inflows of $15.9 billion in September, compared with a net inflow of $8.0 billion in August.

“This resurgence is somewhat surprising,” said Louis Harvey, president of Dalbar Inc., a Boston-based mutual fund consultant. “I would have expected investors to remain disinterested in the stock markets as long as the price of crude oil remains so high. Perhaps these inflows reflect some pent updemand.”

Bond funds had an inflow of $2.8 billion in September, compared with an inflow of $4.2 billion in August. Taxable bond funds had an inflow of $2.7 billion in September. Municipal bond funds had an inflow of $90 million in September.

Money market funds had a net outflow of $43.2 billion in September, compared with an outflow of $13.5 billion in August. Funds offered primarily to institutions had an outflow of $27.5 billion. Funds offered primarily to individuals had an outflow of $15.7 billion.

Overall, the combined assets of the nation’s mutual funds increased by by $90.3 billion, or 1.2%, to $7.55 trillion in September

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

STOCK MUTUAL FUNDS**

September 2004

August 2004*

YTD 2004

YTD 2003*

New Sales

67.06

63.70

706.02

609.28

Redemptions

-56.27

-59.61

-571.60

-517.48

Exchanges In

10.01

9.94

125.74

191.46

Exchanges Out

-10.69

-12.87

-121.32

-185.11

Net New Cash Flow

10.11

1.16

138.84

98.15

TAXABLE BOND MUTUAL FUNDS**

September 2004

August 2004*

YTD 2004

YTD 2003*

New Sales

22.24

22.67

221.78

284.50

Redemptions

-19.83

-18.93

-216.40

-233.12

Exchanges In

2.85

3.53

35.32

64.11

Exchanges Out

-2.52

-2.70

-44.90

-73.70

Net New Cash Flow

2.74

4.57

-4.20

41.79

MUNICIPAL BOND MUTUAL FUNDS**

September 2004

August 2004*

YTD 2004

YTD 2003*

New Sales

4.09

3.79

38.11

48.06

Redemptions

-3.97

-4.15

-47.08

-47.78

Exchanges In

0.60

0.06

6.83

12.13

Exchanges Out

-0.63

-0.62

-10.50

-15.97

Net New Cash Flow

0.09

-0.37

-12.74

-3.55

HYBRID MUTUAL FUNDS**

September 2004

August 2004*

YTD 2004

YTD 2003*

New Sales

9.11

8.04

86.15

65.74

Redemptions

-6.43

-5.69

-56.25

-46.99

Exchanges In

1.08

1.12

12.42

13.72

Exchanges Out

-0.81

-0.88

-9.32

-10.41

Net New Cash Flow

2.96

2.60

33.00

22.06

*Revised **Amounts in Billion $

Contact Bob Keane with questions or comments at: bkeane@investmentadvisor.com.