Stock funds experienced net flows of $29.28 billion in March, up sharply from an inflow of $5.4 billion in February, the Investment Company Institute reported last week. The ICI's flow data substantiates earlier estimates of fund research firms [see MFMN 4/18/02].
The March inflows to stock funds were the category's largest since April 2000. Total net flows for 2001 were just $34 billion.
Whether the large numbers indicate a turnaround in investor sentiment remains to be seen because March was a fairly positive month in general for equities, which likely triggered flows, according to Don Cassidy, senior fund analyst at Lipper.
"I'd like to see what happens in a clearly down month for the market," Cassidy said. "If flows hold up well, then yes," the flows might signal a turnaround, Cassidy indicated. "Will we go back to the huge inflows seen in 1999 and early 2000? No, not soon. There are still a lot of wounds to be healed, some nasty memories of pain."
The majority of the flows into stock funds went into domestic funds, which had net inflows of $26.42 billion in March, according to the ICI. International stock funds had net inflows of $2.85 billion.
Bond funds had an inflow of $6.8 billion in March, after an inflow of $10.71 in February, the ICI reported. Taxable bond funds had an inflow of $6.92 billion, while municipal bond funds experienced an outflow of $118 million.
Money market funds had an outflow of $53.05 billion in March after a February outflow of $5.55 billion, according to the ICI. Slightly more than $34.5 billion of the March outflow came out of money market funds offered primarily to institutional investors. Retail money funds had an outflow of $18.54 billion.