Investors pulled more money out of stock mutual funds in July than they put into them, according to an estimate released Monday by Lipper Inc.
If Lipper's estimate is confirmed when official money-flow numbers come out next week, it would be the third time this year that mutual funds have experienced net outflows of cash. However, some other data collection services disagree with Lipper's findings for July.
According to Lipper, investors yanked a net $1.5 billion out of stock funds last month, the first outflow since March. Funds with an aggressive investment style--which tend to have volatile returns--had the biggest redemptions, Lipper said. Conservative and "value"-style funds--which invest in beaten-down stocks--took in money.
Stock funds have been rocked only a few times by monthly net redemptions since the start of the 1990s. Besides the March outflow, stock funds also saw net withdrawals in February, according to the Investment Company Institute, the fund industry's main trade group.
Next week's release of official July money-flow figures by the ICI will reveal whether stock funds really were hit with their third month of net withdrawals this year. Estimates from research and consulting firms other than Lipper have been all over the place.
TrimTabs.com of Santa Rosa, Calif., for example, estimates a net outflow of $7.3 billion for stock funds in July. But Strategic Insight of New York estimates a $3-billion net inflow and AMG Data Services of Arcata, Calif., estimates a $1-billion inflow. TrimTabs also projects another outflow for stock funds in August--if recent trends hold up.
One thing is certain: Fund sales have cooled sharply along with the stock market this year. After taking in a record $310 billion last year, stock funds saw a net inflow of only about $48 billion in this year's first half, according to the ICI.
Meanwhile, bond fund sales have held up better. Lipper said bond funds took in a net $6.9 billion in July, the biggest amount since January. Most other estimates concur with that trend.
The money-flow numbers closely track performance. The average large-stock growth fund is down 24% this year, while long-term Treasury bonds have returned 4.6%.