Released: September 17, 2007

Investors shun managed mutual funds

Source: John Waggoner, USA Today

Mutual fund investors are voting with their dollars — and actively managed U.S. stock funds are losing by a landslide.

Normally, investors pour money into U.S. stock funds when the stock market rallies. The Standard & Poor’s 500-stock index jumped 11.6% the 12 months ended in July, but investors put just $22.9 billion into U.S. stock funds — the lowest since 1994. Inflows to stock funds hovered near zero in June and July.

A $22.9 billion, 12-month net inflow is just a drop in the bucket for stock mutual funds, which have $6.4 trillion in assets. “It’s a very strong ‘no’ vote,” says Andrew Clark, Lipper’s director of research. The funds that have been winning investors’ dollars:

• International funds, which invest in foreign stocks, and global funds, which invest here and abroad, gained $156 billion the 12 months ended in July.

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