Equity Funds See April Inflows Despite Stock Price Declines

May 16, 2002, 1:00 a.m. EDT 1 Min Read

Equity mutual funds appear to have continued gaining new money in April, according to mutual fund research firms. Equity funds experienced net inflows of roughly $14.9 billion last month according to Lipper of New York. Strategic Insight, also of New York, estimates that Aprils equity fund inflows reached $21 billion. That follows a very strong March, when equity inflows reached $29.28 billion, the highest total since April 2000, according to the Investment Company Institute.

"By their actions, equity fund investors continue to display much great level of personal optimism that is shared among professional money managers and business executives", said Avi Nachmany, Strategic Insights director of research.

"Our customers are telling us that they feel safe to go in the water again."

Value funds had inflows of $7.5 billion in March, while growth funds had a net outflow of $5.1 billion in April, according to Lipper. And small-cap drew $7.5 billion in net flows, while large-cap funds had outflows of $5.1 billion.

"Given the severity of the April stock market declines over 5% for the S&P 500 Index and about 11% on NASDAQ inflows to equity funds showed almost remarkable resilience. We suspect the numbers would have been much weaker had small-cap and value funds not been treating people so well for the past year or more," said Don Cassidy, senior research analyst at Lipper.

Both Lipper and Strategic Insight estimate that bond funds had inflows in the neighborhood of $8 billion in April. Bond funds had net inflows of $6.8 billion in March, according to the ICI.

Lipper pegged money market fund outflows at $26.5 billion, while Strategic Insight said outflows were around $20 billion. Both firms cited seasonal redemptions out of money funds in order to pay taxes as a major factor.