Funds that invest in stocks took in less cash last month


Cash flows into mutual funds that invest in stocks slowed a bit in May from April's level, but demand remained strong, with aggressive growth funds continuing to attract the largest portion of assets, an industry group estimated last week.

Mutual funds that invest primarily in stocks took in an estimated $22.5 billion in net new cash in May, down from April's total of $26.4 billion but still the third highest monthly total on record, according to the Investment Company Institute of Washington. Bond funds added about $500 million in new cash, roughly equal to their growth in April, the group estimated.

Overall, Americans have added $130.6 billion to stock and bond mutual funds in the first five months of this year -- more than the net amount flowing into stock and bond funds in all of 1995.

Last year, $123.4 billion in net new cash flowed into stock and bond mutual funds, though that total represented $128.1 billion of cash going into stock funds and $4.7 billion flowing out of bond funds. So far in 1996, stock funds have taken in $121.6 billion, still slightly below the 1995 total.

That is not the case for every fund, however. The country's largest mutual fund, Fidelity Magellan, a property of FMR Corp., suffered net outflows close to $1 billion in May, according to data released Wednesday by Fidelity.

Assets in the Magellan fund fell to $55.2 billion at the end of May from $56 billion at the end of April, even though the value of the fund's investments grew nearly one-half of 1 percent in May.

Long a top-selling fund at Fidelity, Magellan has suffered this year as its performance lagged. The poor performance and attendant negative publicity stemmed from decisions beginning late last year by Jeffrey Vinik, the fund's former manager, to place as much as 20 percent of its assets in bonds and an additional 15 percent in cash. Vinik resigned at the beginning of this month.

Pub Date: 6/16/96

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.