Investing November 20, 2001

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.
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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.

Benefits November 19, 2001

Q1 Hiring to Remain Flat

November 19, 2001(PLANSPONSOR.com) - Those looking for a rebound in the job market in early 2002 will be disappointed - hiring activity is expected to remain at the levels associated with the recessions of the early eighties and nineties, a new survey finds.
Reported by

Manpower Inc.’s quarterly survey of 16,000 US businesses found that hiring levels will continue a decline that began early last year. In the first three months of 2002:

  • only 16% of firms plan to add jobs, compared to the 27% who planned to add jobs a year ago, and
  • some 16% anticipate cutting staff , in contrast to the 10% recorded a year ago

The remaining firms plan to maintain staffing levels or were uncertain about hiring activity

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The survey also revealed that in the first quarter of next year:

  • a little over one fifth of durable goods manufacturers plan to cut jobs, and
  • some 15% of other manufacturers anticipated cutbacks

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