Investors have been pulling cash out of stock funds, group reports

January 18, 1998|By BLOOMBERG NEWS

NEW YORK -- A California research group reports that investors are withdrawing cash from U.S. and international stock funds this month amid the tumult in world markets.

Some of the money is being shifted to bond funds and money market funds, where returns tend to be more predictable, says the group, Trim Tabs Financial Services Inc. of Santa Rosa.

An estimated net $1.4 billion was pulled from stock funds in the first five business days of the month, according to Trim Tabs, which tracks fund flows reports. In the same period, about a net $3.1 billion was invested in bond funds.

"It's been a crummy start to the new year as investors flee international stock funds and limit new purchases of domestic stock funds," said Carl Wittnebert, research director at Trim Tabs.

Trim Tabs declined to disclose which fund companies are reporting net outflows, and the report conflicted with comments from Vanguard, Schwab and Scudder Kemper Investments Inc.

Schwab reported that a net $520 million flowed into the 1,500 stock funds that it markets for other companies through its Mutual Fund Marketplace in the early days of January. That compares with $420 million of net inflows during all of December.

The Trim Tabs report would be alarming for the industry since January tends to attract the highest net inflows as the highest number of new 401(k) plans are established and investors re-allocate their plans.

A record $29.39 billion poured into stock funds last January and that surpassed the previous high of $28.9 billion that occurred in January 1996, according to the Investment Company Institute.

Pub Date: 1/18/98

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