BOSTON (AP) — A January market rally wasn’t enough to get investors back into stock mutual funds in a big way. But they did stop pulling out more cash than they were putting in, ending an eight-month string of net withdrawals.
Industry consultant Strategic Insight said on Monday that deposits into U.S. stock mutual funds roughly equaled withdrawals in January. It was the first month since April that withdrawals didn’t outpace deposits. Net withdrawals totaled $137 billion over the last eight months of 2011 as investors worried about Europe’s debt crisis and indications that the U.S. and global economic recoveries might be stalling.
The movement of money into stock funds is an indicator of investor confidence, and economic news became more encouraging last month. The market had its best start in 15 years, with the Standard & Poor’s 500 index returning 4.5 percent.
However, mutual fund investors were still cautious. Although funds specializing in relatively low-risk dividend-paying stocks attracted $4 billion in new cash in January, investors continued to withdraw from funds in higher-risk segments of the market.