Fund Favorites Slip in February

(Editor’s Note: On March 23, Lipper reported that it had miscalculated some of the data and published the correct figures. See ” Lipper Miscalculates February Outflows.”)

Investors pulled $11.4 billion from stock funds in February, heading for calmer waters like money market funds mutual fund researcher Lipper said, according to Reuters. Money market funds took in a net $45.8 billion in February, according to the report.

That was only the fourth month with net outflows from stock funds since the summer of 1989.  The outflows were also the first since August 1998, in the midst of the Russian debt crisis.

Record Reversal

The latest outflows topped the previous record of about $8 billion in October 1987, according to Lipper.

Still, the February outflows were only about 0.3% of the $4 trillion currently held in stock funds, compared with 1987 when those redemptions accounted for about 5% of total fund assets.

During the month value funds were the only diversified equity fund type with a net inflow ($7.7 billion). Balanced funds also took in a net $500 million inflow.  Fixed income funds (other than money market funds) had net inflows of $1.5 billion.

On the other hand, growth funds suffered net outflows of $4.2 billion, including $2.5 billion in outflows at growth funds that invest in large caps.  Those had been “go-go” investments in the late 1990s.

Sector funds saw net outflows of nearly $2.0 billion, including $1.6 billion from science and technology funds.