Mutual fund redemption rates continued to rise faster than gross sales last year as investors spent some of their investment gains on luxury purchases and reinvested other gains in non-mutual fund investments, according to a new report.

Long-term mutual funds set a record last year with approximately $1 trillion in redemptions, up from approximately $747 billion in 1998, according to Financial Research Corp. of Boston, a mutual fund tracking and consulting firm. That increase in redemptions minimized the effect of what had been a record year for gross sales for the industry in 1999. Gross sales totaled roughly $1.2 trillion, according to FRC, in a report it made public March 9.

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