Initial Jobless Claims Continue Downward Trend

November 21, 2001(PLANSPONSOR.com) - Initial unemployment benefit claims continued their downward trend in the week ending November 17, according to the weekly figures released by the Department of Labor.

The number of those lining up for first-time unemployment benefits was down for the fourth consecutive week, falling by 15,000 to settle at 427,000.

The more stable four-week moving average of initial claims, viewed as a better indicator of unemployment as it smoothes out weekly volatility, fell to 454,250, its lowest level in two months.

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Nevertheless, the unemployment picture remains bleak ? the four-week moving average of those claiming another round of benefits increased to 3.73 million, its highest level since 1983, for the work week ending November 10, the latest week for which data are available.

Due to the Thanksgiving holiday, the data was released a day earlier than usual.

Appetite for Stock Funds Returns

November 20, 2001 (PLANSPONSOR.com) - After three months of net withdrawals, equity mutual fund sales finally outweighed redemptions - with investors pouring $1.6 billion into equity funds in October as the equity markets recovered, according to estimates from Lipper.

In comparison, data from September show that investors withdrew some $32 billion from stock mutual funds. In addition, stock funds experienced net outflows in February and March, before turning positive in the April-June period and then resuming negative flows from July until September.

Industry Leader Inflows

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According to industry members, demand remains strong into November, with heavyweights Vanguard, T Rowe Price and Fidelity all reporting buoyant sales.

In October:

  • the Vanguard Group saw inflows of $2.0 billion into stock funds in October, primarily index and value oriented products, while bond funds took in $2.2 billion,
  • Fidelity had net flows of $600 million into its stock funds, $1.2 billion into bond funds and $1.6 billion into money funds
  • though not mentioning figures, T Rowe Price reported strong inflows into both equity and fixed income funds

According to Lipper, the average diversified stock fund gained 3.81% over the month. In comparison,

  • the Dow Jones Industrial Average gained 2.6% in the month,
  • while the Nasdaq increased by 12.8%

Fixed Income and Money Market

October was also a bumper month for bond funds, which saw inflows of $12.5 billion, the second highest in 2001, after August’s $15.4 billion. On a year-to-date basis, fixed income inflows, at $73.5 billion, are triple the amount of equity funds, which are estimated at $21.4 billion, according to Lipper.

Money market funds attracted $73.5 billion in October, higher than the same period in the last four years and 2001 second-highest intake since January’s $99 billion.

In terms of market cap, investors gravitated towards small cap fund while in terms of investment style they shied away from aggressive strategies, betting on value buys instead.

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