Mutual fund flows were down sharply in February from the previous month and stock funds recorded their worst month in over two years with $3 billion in net outflows, according to the Investment Company Institute of Washington D.C.

The last time stock funds recorded net outflows was August 1998 when $11.2 billion flowed out of the funds. For the first two months of this year stock fund flows totaled just $22 billion, down $78.2 billion from the first two months of 2000, according to ICI figures. Overall, total flows for all categories of funds amounted to $142.5 billion in February, down significantly from January’s total flows of $253.6 billion, according to ICI figures. Fund flows have been negatively impacted by a prolonged down turn in market performance, which has stanched new purchases, according to the ICI. Money market funds attracted the most amount of new money with $55 billion in net flows, but that is down considerably from the $103 billion money market funds attracted in January, according to the ICI. Municipal bond fund flows increased from a net $1.3 billion in January to a net $1.9 billion in February, according to the ICI’s figures. Municipal bond fund flows were the only category to record a one-month increase in flows, according to the ICI. Total fund assets sank 4.7 percent in February from $7.2 trillion in January to $6.8 trillion in February, according to the ICI.

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