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$18.4 Billion Stock Fund Inflow Reported

July 25, 2001|Times staff, Bloomberg News

Easy come, easy go?

Investors poured a net $18.4 billion in U.S. stock mutual funds in June--the largest monthly inflow since January--according to an estimate by fund tracker Lipper Inc.

But amid this month's weak equity market, stock-fund investors are on pace to withdraw a net $19.3 billion, according to TrimTabs.com, a Santa Rosa, Calif.-based company that also estimates fund flows.

So-called value funds, which invest in stocks considered cheap relative to underlying company fundamentals such as earnings, drew the bulk of June's inflows, Lipper said.

Fund flows tend to reflect recent performance, and in this year's rocky market, value stocks have held up far better than so-called growth stocks, which are more steeply priced relative to fundamentals because of supposedly brighter earnings prospects.

A separate report from the New York-based consulting firm Strategic Insight pegged the June net inflow at $14 billion.

The Investment Company Institute, the fund industry's main trade group, is expected to issue official June figures by Monday.

Barring a market turnaround this week, the net outflow in July could offset all or part of June's inflow, TrimTabs said. Net cash flows measure the amount of new money investors put into stock funds minus the amount they took out through redemptions.

After rising 2.4% in June, the Nasdaq composite index has tumbled 8.9% this month. The Standard & Poor's 500 has fallen 3.9%, extending its losses from June, as quarterly earnings reports have disappointed investors and raised concern about the outlook for the rest of the year.

Bond funds, meanwhile, took in a net $5.8 billion in June, Lipper estimated, despite a net outflow of $1 billion from high-yield funds.

Vanguard Group, American Funds and Pimco have been the best-selling fund firms this year as investors have favored relatively conservative stock funds and fixed-income offerings, Strategic Insight noted.

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