Stock and bond mutual fund net inflows reached and possibly exceeded $90 billion during January 2013, excluding additional inflows to ETFs. January net inflows were dramatically higher than the prior all-time monthly flows records of $58 billion reached nearly a decade ago on January 2004, according to Strategic Insight, which bases this estimate on January flows data provided by the Investment Company Institute and proprietary surveys of leading distributors and fund managers.

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Company Press Release

January Inflows Set New Mutual Fund Industry Record

Stock and Bond Mutual Funds Eclipse $90B of Monthly Net Intake

NEW YORK, NY – January 31th, 2013 – Stock and bond mutual fund net inflows reached and possibly exceeded $90 billion during January 2013, excluding additional inflows to ETFs. January net inflows were dramatically higher than the prior all-time monthly flows records of $58 billion reached nearly a decade ago on January 2004. Strategic Insight, a business intelligence provider to the fund industry, bases this estimate on January flows data provided by the Investment Company Institute and proprietary surveys of leading distributors and fund managers.

Approximately $51 billion, or more than half, of the January net flows went into stock and balanced mutual funds, marking the largest monthly amount in more than a decade. Additional net inflows went to stock ETFs. These figures suggest that US investors are finally re-entering the stock market through mutual funds.

“In recent years, stock investors watched the rising stock market with either disbelief or regret. January flows data suggests that post-election assurance of political stability and tax rates combined with rising home prices, falling unemployment, and fading memories of 2008 have helped investors overcome, at least for now, a state of investment anxiety,” commented Avi Nachmany, SI’s Director of Research.

“As economic life across America slowly improves, investment in stock funds will increase too. Over 80% of all stock fund balances are dedicated to retirement savings, thus having accumulation and withdrawal time-horizons of 20, 30, or 40 years for many investors. As Americans become more confident about the future, investing for retirement through stock mutual funds will expand,” added Mr. Nachmany.

Naturally, some of the January net inflows are seasonal deposits early in the New Year, as well as reversals of tax-selling redemptions of December. But most January inflows are from hesitant investors again voting their dollars, now and likely in future months, into stock funds.

In January 2013, net inflows to bond funds are estimated to exceed $40 billion, significantly above 2012’s average monthly flows to bond funds of $27 billion. Strategic Insight projects bond fund inflows to persist in the coming months, as investors holding $10 trillion of cash slowly search for income opportunities elsewhere.

Strategic Insight, founded in 1986, is a leading 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 more than 250 firms worldwide, including the largest U.S. mutual fund companies. Visit us atwww.SIonline.com. SI’s parent,Asset International, is a privately held provider of information and technology to global pension funds, asset managers, financial advisers, banking service providers, and other financial institutions in the private and public sector. The company has offices in New York, Boston, Hong Kong, London, Melbourne and Stamford, CT. For additional information, visitwww.AssetInternational.com.

 

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