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
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.