Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, May 31, 1990 TAG: 9005310162
SECTION: BUSINESS PAGE: A-11 EDITION: METRO
SOURCE: The New York Times
DATELINE: LENGTH: Medium
May "is the best month we've ever had," said Chrissy Snyder, a spokeswoman for the Janus Group of mutual funds, based in Denver.
At Fidelity Investments, "we're having the strongest month since early 1987" in terms of cash flow into stock funds, said Michael Hines, a spokesman.
The latest buying surge for stock mutual funds seems to be strongest among funds marketed directly to customers, like Janus and Fidelity, but funds sold through brokers and insurance agents are also reporting strong sales.
"People have been liquidating money market funds, trying to get back into the stock market to take advantage of this rally," said Robert Leo, the director of mutual funds for Shearson Lehman Hutton Inc.
The May stock market surge appears to have been fueled in part by mutual fund cash, which has piled up this year as managers were reluctant to put to work the money that investors were pouring into the funds.
At the end of April, stock funds had a record 12.5 percent of their assets in short-term money market instruments, known in the industry as "cash," according to figures released Wednesday by the Investment Company Institute, a trade group.
That level was up from 11.9 percent a month earlier, and broke the previous high of 12.2 percent, set in June 1982, just as the 1980s bull market was about to begin.
There still appears to be a substantial amount of cash available at mutual funds, despite share purchases this month.
"Some of these funds have not been able to invest the money as rapidly as it has come in," said Steve Norwitz, a spokesman for T. Rowe Price.
by CNB