Stock Mutual-Fund Selling Slows --- Withdrawals Outpaced Investments in October By a Narrower $7.7 Billion
Investors were net sellers of stock mutual funds in October, even as the market rallied strongly in the month's latter half.</br></br>Investment Company Institute data show stock mutual funds experienced net withdrawals of $7.7 billion, as new money added to stock accounts of $74.9 billion was overwhelmed by redemptions of $77.5 billion. An additional $5.1 billion was withdrawn from stock funds because of exchanges into other fund categories.</br></br>October's net outflows were well under the $16 billion investors had withdrawn in September. During October, the stock market reversed its downward trend started during the summer. The Dow Jones Industrial Average had its best month since January 1987, soaring 11%.</br></br>But investors' skepticism over stocks persisted. Taxable bond funds continued to snare money, receiving net new cash of $7.8 billion. But the pace of the net sales slowed from September's $13.1 billion.</br></br>Year-to-date through the end of October, taxable bond funds grabbed a net $109.6 billion, while stock funds have had $26.5 billion in net withdrawals. Among other types of funds, hybrid mutual funds, which invest in both stocks and bonds, reported net redemptions of $1 billion after net withdrawals of $650 million in September. Investors took out a net $1.5 billion from municipal-bond funds, a significant change from September, when they added $2.3 billion.