Mutual Fund Inflows Set Industry Record

Stock and bond mutual fund net inflows reached and possibly exceeded $90 billion during January, excluding additional inflows to exchange-traded funds (ETFs).

January net inflows were dramatically higher than the prior all-time monthly flows record — $58 billion—reached nearly a decade ago in January 2004, according to Strategic Insight, an Asset International company. 

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.   

“In recent years, stock investors watched the rising stock market with either disbelief or regret. January flows data suggests that postelection 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.   

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.