Net Flow Into Stock Funds at All-Time High of $7.6 Billion

Investors poured into stock mutual funds at a record pace in February, the industry’s trade group says.

The Investment Co. Institute reported that net cash flow into stock funds hit an all-time high of $7.6 billion in February, versus $6.9 billion in January and $3.2 billion in February, 1991.

Net cash flow is new fund purchases minus redemptions, plus net exchanges between funds--for example, cash moving from money-market funds into stock funds.

In February, new stock fund purchases totaled $11.4 billion, down from $13.5 billion in January. But investors redeemed just $4.8 billion of stock fund shares in February, down sharply from $6.2 billion redeemed in January.

Meanwhile, exchanges between funds brought an additional $1.1 billion into stock funds in February, as investors continued to leave low-yielding money fund accounts.

Among bond mutual funds, net cash flow in February was $9.7 billion, versus $10.0 billion in January and $4.3 billion a year earlier.

Many mutual fund companies have said in recent weeks that they were on track to take in record sums this quarter, as investors fled money funds, bank CDs and other low-return investments for higher returns in stocks and bonds.

But a new survey suggests that investors’ enthusiasm for stock funds may be ebbing. In its monthly consumer poll for Fidelity Investments, the University of Michigan said 22% of respondents plan to buy stock funds soon, down from 28% in February.