WEST PALM BEACH, FL (HEDGECO.NET) – Investors pumped up US stock mutual funds in February, according to estimated data provided by Lipper Inc. Such inflow was however smaller than January inflows.Seasonal factors may have helped to boost the January data to $47billion. Seasonal contributions to retirement plans may have impacted the January inflows according to published reports. January bondfunds added $2.8 billion in January but zero gains in February.
The other factor the report noted was that stock market activity was stronger during the month of January, while such activity softened in February. For instance, the NASDAQ Exchange made gains in January but February saw some declines. However the Dow Jones industrial average and the S&P gained a modest 1% in February.
According to Lipper, many of the firms implicated in the mutual fund scandals experienced significant fund outflows from their diversified portfolios during the month of February. In all the diversified portfolios lost about $3 billion in February. Value and inexpensive stocks gained $6.1 billion, suggesting that investors were concerned with large stock valuations following the gains in January. According to the Lipper data, growth stocks experienced a net outflow of $100 million in February as well. Money market portfolios had outflows of $22.2 billion last month, according to Lipper�s estimates.
High yield bond funds saw significant net outflows of $3.5 billion in January and according to the data, such outflow represents the first for high yield bonds since July of 2003.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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