Stock and bond funds had inflows of $21.5 billion in September, an increase of $8 billion from a month earlier, according to Financial Research Corp. However, money market funds lost $45.9 billion, bringing both long-term and short-term mutual funds a loss of $24.4 billion for the month.

Meanwhile, Lipper also released its analysis of September flows, attributing the runoff in money market fund assets to seasonal factors, including tax-payment cycles and corporations' need for operating liquidity. Nonetheless, Lipper cautioned, investors continue to exercise a cautious stance toward the market, with the latest pace of money being invested in mutual funds below the year's average and the pace of net purchase in 2003.

Discounting the automatic inflows into equity funds from 401(k)s and other defined contribution plans, Lipper said, equity funds probably would have had a flat month. "That does not speak strongly for confidence in Wall Street, funds as a choice or for the prospects of millions of investors. Some education seems sorely needed," Lipper concluded.

FRC's numbers once again showed another stellar month for American Funds, far and away the hottest fund group, and for the moment, nobody else is even close. American experienced inflows of more than $6.1 billion in September, and even while that represented a slight downturn from its September 2003 totals, it marked an 11% increase from $5.5 billion in August. The firm is still No. 3 behind Vanguard and Fidelity for total assets under management, but the gap is quickly closing. Months like September, during which it outpaced Vanguard by more than $1.6 billion, will go a long way toward moving American closer to the top.

Still, perhaps the most intriguing part of FRC's statistics was the continued success of the top-shelf exchange-traded fund manager, Barclay's Global Investors. Barclay's came in third place among fund firms' net flows in the month of September, up four spots from No. 7 in August.

In terms of net flows into individual funds, American still takes top honors. Six of the top eight best-selling funds in September were American Funds, with the Growth Fund of America leading the way with $1.3 billion in net flows. Year-to-date, the top five best-selling mutual funds are all owned by American.

Among the top 25 fund firms, 10 have suffered outflows since the start of 2004. However, most of those are firms touched by the mutual fund scandal. Putnam Investments has suffered outflows of $20.3 billion since the start of the year, almost $12 billion more than it had lost year-to-date this time in 2003. On the positive side, Oppenheimer, the eighth-largest fund company, has seen $4.3 billion in inflows since the start of 2004, after drawing in $862 million year-to-date at the same time last year.

In its breakdown by fund type, FRC said domestic equity funds drew in $11.4 billion, while international/global funds took in $7.5 billion. By Morningstar category, there were a few significant shifts. Foreign large-value funds slipped from No. 6 in August to No. 9 in September, while natural resources fund jumped from No. 16 to No. 12. Bank loan funds moved from No. 12 to No. 8, and foreign large stock funds skipped up seven spots from No. 18 to No. 11.

The markets as a whole have spun upward since the re-election of President Bush, FRC said, forecasting that the uptick in long-term assets in September might suggest a possible boom for the industry as the holiday season approaches.

A few trends appear destined to continue, including the increased pumping of money into ETFs at companies like Barclay's, and the sustained growth by No. 3 fund firm American.

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