U.S. stock mutual funds received $2.7 billion in inflows in January, reversing four consecutive months of outflows. “I think investors are growing more comfortable coming back into the stock market after 2009’s rally,” Morningstar Senior Fund Analyst Sonya Morris told The Wall Street Journal. “They’re beginning to show signs of shaking off some of the fear that was induced from 2008’s downturn.”
In addition, international stock funds, which have taken in money in recent months, had strong sales of $8.1 billion in January. Still, bond funds remained the most popular category, netting $28 billion.
But at Vanguard, stock funds proved to be more popular than its bond funds in January, with the former taking in $7.4 billion and the latter $4.6 billion.
However, George Gatch, J.P. Morgan Funds president and chief executive officer, said 75% of the flows to his fund family have been to fixed income and only 25% to equity funds. “Because of the lost decade, where equity markets have been negative in total return, we think financial advisers and their clients continue to be very risk adverse, and I am not sure what catalyst would change that,” he said.