As Mr. Market continued to slump, investors still poured their money into mutual funds. New York City-based consulting firm Strategic Insight found that net inflows into equity funds totaled $6 billion and bond fund inflows totaled $5 billion in June. ETFs added $7.5 billion in assets in June.
Company Press Release
NEW YORK, NY – July 16, 2008 – Despite rising worries about the US economy, the financial sector and inflationary pressures, US investors put more than $11 billion into US stock and bond mutual funds in June, as long-term funds experienced aggregate positive inflows. Some June fund flow highlights, according to preliminary figures:
* Equity fund net inflows totaled an estimated $6 billion in June. This followed net inflows into equity funds in April and May. Particularly heartening is the fact that investors put cash into equity mutual funds in June despite an 8.4% decline in the S&P 500 over the course of the month, so they were not chasing “hot” performance – rather, they were continuing the long-term, buy-and-hold strategies that have underpinned the mutual fund industry.
* Bond fund inflows approximated $5 billion in June. Given inflation worries and the relatively flat performance of the Lehman Aggregate Bond Index in June, these flows represented investors’ commitment to fixed-income assets as part of diversified portfolios.
* Money market funds experienced net redemptions at the end of June, which is typical at the end of a quarter. But in the first half of July it appears the cash has been flowing back into money-market funds.
* Not included in the above figures: ETFs pulled in roughly $7.5 billion in June across all asset classes. SI’s ETF data implies that most net gains among ETFs in the first half of 2008 is attributable to short-selling, which highlights the importance of ETFs to institutions.
“Markets remain turbulent, but mutual fund shareholders continue to show remarkable resilience. With roughly two-thirds of equity mutual funds intended for retirement accounts, down markets can present buying opportunities for fund investors, especially via dollar-cost averaging programs aimed at long-term investing,” said Avi Nachmany, Strategic Insight’s Director of Research.
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In its 22nd year, Strategic Insight has become a widely used and well respected research firm for the mutual fund and wealth management industry, providing clients with in-depth studies, consultation, and electronic decision support systems .Strategic Insight assists over 250 organizations worldwide, including the largest mutual fund management companies operating in the U.S. and the largest insurance companies serving the VA business. SI clients are responsible for about 90% of all U.S. mutual fund assets. Strategic Insight also serves many Wall Street equity research and investment banking firms, service companies, and many of the largest asset managers in Europe and Asia. For more information, visit our home at www.sionline.com.
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