Early estimates of January's equity fund flows turned out to be way off. Stock funds experienced net flows of nearly $20 billion, the Investment Company Institute reported. Lipper's estimate of $3 billion in flows indicated that it was the worst January in terms of equity inflow since 1991 (See MFMN 2/25/02).

There are two reasons for the inaccurate estimate, said Donald Cassidy, senior fund analyst at Lipper. The first is that Lipper arrives at its estimates by comparing the end of the month assets with those of the previous month, factoring in performance. That can prove to be an inaccurate method when firms report distributions, which typically happens in January. Some funds report assets as if the distribution has been taken out while others report assets as if the distribution has been reinvested, according to Cassidy.

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