Investors tiptoe back into US stock mutual funds

[July 26, 2012]  WASHINGTON (AP) -- Investors added cash to each major mutual fund category during the week ended July 18, with more money flowing into U.S. stock funds than out for the first time in seven weeks.

Stocks:

A net $99 million was deposited into U.S. stock funds for the weeklong period, the Investment Company Institute said Wednesday. It was the first time since the week ended May 30 that U.S. stock funds attracted new cash. The recent withdrawals suggest investors remain wary of volatile stock prices. But the latest weeklong period brought some relief, as the Standard & Poor's 500 index rose 2.3 percent.

Investors added $542 million into funds investing primarily in foreign stocks. Those funds have attracted new cash for nine consecutive weeks. Overall, net deposits into stock funds totaled more than $640 million during the latest week.

Bonds:

Investors deposited a net $6.5 billion into bond funds, slightly more than during the preceding week. The latest week's total includes $5.1 billion of net deposits into taxable bond funds, which primarily invest in corporate bonds, and nearly $1.4 billion into municipal bond funds, which invest in bonds issued by state and local governments. Investors have added cash to bond funds in all but one week so far this year.

Hybrid funds, which invest in both stocks and bonds, attracted $905 million in net deposits last week.

Overall, investors deposited a net $8 billion into funds of all types, up from nearly $7.6 billion in the previous week.

[Associated Press]

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