Cash Flows Into Stock Funds at Record Rates

Investors busily pumped money into U.S. equity mutual funds in the early days of 1997, after slowing their purchases in December amid concern about the market’s volatility.

Several fund groups, including OppenheimerFunds Inc., Janus Capital Corp. and Charles Schwab & Co., reported Monday that flows so far this month are at or near record rates.

For December, the Investment Company Institute estimated that a net $13.5 billion was invested in stock funds, down from $17.11 billion in November. Last year’s lowest equity fund inflows occurred in July, when $5.76 billion was invested, and the average monthly inflow for the year was about $19.4 billion, the trade group said.

For all of 1996, an estimated record $223 billion poured into equity funds, exceeding the previous all-time high of $129.6 billion in 1993, the ICI said.

Individual investors were net purchasers of bond funds in December for a second straight month, the ICI reported. An estimated $3.5 billion was added to bond funds in December, the trade group said.

“January looks like it’s going to be a record month for us unless something happens to the market,” said Tim Pitts, executive vice president at OppenheimerFunds in New York.

January tends to be the top sales month of the year for mutual fund groups because it’s the time when many companies match distributions that employees make in retirement plans. Also, January is the month when the highest number of 401(k) plans are established.

Denver-based Janus Capital said about $420 million flowed into its mutual funds in the first nine days of January, compared with $183 million during all of December.