Investing December 27, 2000

Ill November Markets Shrivel Mutual Funds, Flows

December 27, 2000 (PLANSPONSOR.com) - Slumping markets drew the nation's combined mutual fund assets down 5.2% in November to $6.826 trillion, as cash inflows shriveled and asset values tumbled.
Reported by

The scenario is likely to be played out in 401(k) statements this quarter.

Stock mutual funds decreased by 10% ($428.5 billion) during the month, as net cash inflows of $8.82 billion were less than half of October’s $19.16 billion pace, according to Investment Company Institute figures.

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Assets of hybrid funds dropped by $11.1 billion and also had new outflows of $217 million for the month.  However, in October hybrid funds had suffered a net $1.17 billion outflow.

Bond fund assets actually increased by $679 million in November despite a net cash outflow of $639 million during the month.

Stocking Up?

With stock funds, domestic funds all experienced net cash inflows, but at a slower pace than in October, with:

  • Aggressive growth funds attracting a net $5.06 billion, down from $7.19 billion in October
  • Growth funds pulled in a net $3.99 billion in November, compared with $8.59 billion a month earlier
  • Growth and income funds had an inflow of $1.69 billion in November, in contrast to the net $262 million outflow in October.

On the other hand, stock funds that invest abroad saw some $2.88 billion in net cash outflow, up sharply from October’s $206 million pace.

Bond Reversal

Bond funds reversed October’s trends, with an outflow of $673 million in November for taxable bond funds, compared with $2.58 billion in October.   Municipal bond funds managed to attract a net $34 million in new November cash investment, down sharply from an inflow of $589 million in October.

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