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Bonds, Large Blend Top the '07 Charts

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Fund data complied by the Financial Research Corporation of Boston shows investors have been actively moving from equities to bonds, with intermediate-term bonds capturing the top spot of all Morningstar fund categories last year. These bonds drew almost $70 billion in net inflows, up from $40 billion in 2006.

Still, large-blend funds and foreign large-blend funds captured $63 billion and nearly $48 billion respectively. The large-blend category had inflows in 2006 of about $23 billion, though foreign large-blend was the winning category of that year with $53 billion of net inflows.

Target date funds continue to be popular with investors. On a combined basis, funds with target dates of 2000-2030 and beyond had total fund flows in 2007 of $58.07 billion. That’s a jump of about 70 percent from 2006, when target funds drew about $34 billion in fund inflows.

In December alone, stock and bond funds (including ETFs) had net inflows of $47 billion.

Excluding funds of funds data, American Funds is the large asset manager of 2007 with $1.15 trillion vs. the Vanguard Group with $1.09 trillion, according to FRC estimates. Fidelity is third with $929 billion.

In terms of net flows in 2007, Vanguard had $76 billion while American had $75 billion; Fidelity had $4.3 billion. American experienced a similar level of net inflows in 2006 ($74 billion), but Vanguard had about $43 billion during that period and Fidelity had $16 billion. Barclays’ net inflows were $59 billion in 2007 and $49 billion in 2006.

Specific funds that attracted the most net inflows in 2007 include the SPDR Trust with $30.75 billion, Dodge and Cox International Stock Fund with $18.44 billion and the American Funds Capital Income Builder with $17.53 billion. Both the Dodge & Cox and American Funds products had net inflows in 2006 of about $12.5 billion, while the SPDR Trust had net outflows of $1.1 billion. Other American Funds that were popular last year were American Funds Capital World Growth and Income ($15.63 billion of inflows), American Funds Growth Fund of America ($14.78 billion) and the American Bond Fund ($7.3 billion).

Including ETFs but not money-market funds, the largest 25 fund groups in the industry had an estimated $8.4 trillion in assets at the end of 2007 vs. $7.4 trillion at the end of 2006. The total inflows for the top 25 fund groups were about $376 billion last year, FRC data shows, up from $299 billion in 2005.

Janet Levaux is the managing editor of Research; reach her at [email protected]