American Funds back in the black, boosted by shift to equities

Firm enjoyed net inflows in January, first positive flow month since May '09

Feb 12, 2013 @ 2:53 pm

By Jason Kephart

equities, bonds, american funds
+ Zoom
(Bloomberg)

For the first time in almost four years, investors deposited more money into American Funds than they pulled out in a single month.

American Funds had net inflows of $964 million in January, the first month of net inflows since May 2009, according to Lipper Inc. Over that time, investors have pulled over $230 billion more out of the funds than they have put in.

American Funds benefited from investors' rushing back into equities to start the year. Stock funds overall gained $34 billion in new cash for the month, the most since January 1996, Lipper reported.

Three-quarters of American Funds' $987 billion of mutual fund assets are in its equity funds, so investor sentiment toward stocks has a big effect on the firm, said spokesman Chuck Freadhoff.

“It works both ways for us,” he said. “When people left equities for bonds, it hurt us. Now people are coming back into the market.”

Mr. Freadhoff is taking the reversal of fortune in stride.

“It's nice, but it's only one month,” he said. “We like to think long-term here.”

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