Mutual fund investors overcame gloomy indices in July and put a lot of money into domestic and overseas equity mutual funds, giving them record gains by several measures, according to Lipper’s Fund Flows Insight Report released on Wednesday.
Equity mutual funds posted gains of 7.92%, their strongest July gain in more than 40 years. Within that group, stock and mixed-equity funds posted gains of $14.6 billion for July, up from $12 billion in June. Of Lipper’s four major equity macro-groups, the World Equity Funds attracted the largest draw of net new money. Minus outflows, it took in about $8.5 billion for July.
Bond funds had net inflows for the seventh consecutive month in July, attracting $33.4 billion. Sales of lower-quality corporate bonds pushed inflows into fixed income funds higher by 2.12%. Investors looking for higher-yielding investments continued to invest in these funds, pushing corporate spreads down.
Money-market funds, however, had a rougher time last month. The group extended a six-month trend of losses by handing back some $48.3 billion during the month, offsetting gains from the other asset classes almost exactly, according to Lipper. The poor performance also dragged down results for fixed-income funds, resulting in net outflows of $14.8 billion.