Bloomberg News Service
BOSTON — U.S.-based stock funds are expected in February to see their biggest monthly cash outflow ever, and their first since Russia’s debt default spooked investors in August 1998.
About $12.5 billion is expected to flow out of stock funds this month, topping the previous record of $11.7 billion in August 1998, according to TrimTabs.com Investment Research Inc., which tracks fund cash flows. TrimTabs estimated $9.9 billion had actually flowed out of stock mutual funds through Feb. 22.
"February has been a very tough month for the markets, particularly the Nasdaq," Burton Greenwald, a Philadelphia-based mutual fund consultant said. "There’s been a flight to safety."
After falling by 39 percent in 2000, the Nasdaq composite index has dropped 10.6 percent this year. U.S. stock funds tracked by Bloomberg have fallen an average 4.49 percent this year through Monday.
A stock fund outflow in February would follow the best month ever for the mutual fund industry in January, according to the Investment Company Institute, the industry’s trade association.
Mutual funds took in a record $137.14 billion in January, eclipsing the previous record of $86.86 billion set in January 1999. Stock funds took in $24.58 billion in January, more than double the $11.64 billion they attracted in December.
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