The Markets March 3, 2011

FRC Sees Strong 529 Plan Growth

College savings plans have seen a 56% growth in assets over the past 24 months, according to industry data from Financial Research Corporation (FRC).
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Investor contributions to 529 savings plans have increased by 35% over the past two years, FRC reported, adding that broad market indexes have been positive over the last two years while volatility has decreased.

Investors have shifted back into longer-term investment products as well. FRC found net outflows of $1 trillion from money market mutual funds over the last two years.

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“The dramatic growth of college savings plans is nearly 30% higher than previously projected. It is also worth noting that new accounts opened during this same time period increased by 15%,” said Paul Curley, Director of 529 College Savings Research at FRC.

The Markets March 3, 2011

Funds Enjoyed $42B in January Inflows

Stock and bond funds experienced net inflows of $42.5 billion in January, according to Financial Research Corporation (FRC) data.
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According to FRC, the Equity objective posted net inflows of $26.6 billion, followed by the International/Global Equity objective with $13 billion, Corporate at $11.3 billion, and International/Global Fixed Income at $5.1 billion. Suffering January outflows were Government ($1.1 billion) and Tax Free ($12.4 billion).

By Morningstar category, Large Blend had $7.1 billion in inflows followed by Bank Loan with $6.2 billion inflows, High Yield Bond with $5 billion in inflows, Large Growth with $3.7 billion in inflows, and Foreign Large Blend with $3.6 billion in inflows.

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The largest fund houses in January in terms of assets were The Vanguard Group ($1.4 trillion), American Funds ($980 billion), Fidelity Investments ($886 billion), BlackRock ($585 billion), and PIMCO Funds ($411 billion).

Powershares QQQ Trust 1 attracted $2.5 billion to lead the January fund sales chart. The Vanguard Group claimed three of the top six fund sales slots with Total International Stock Index at $2 billion inflows, Vanguard EM ST. IX ETF at $1.34 billion, and Vanguard Total Bond II at $1.23 billion.

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