A happy trickle

Mutual fund executives probably won't be dancing in the street over reports of modest inflows into stock mutual funds in January. Still, the direction of the flow may be a sign that things are finally looking up for the beleaguered fund industry, said Avi Nachmany, director of research for Strategic Insight Mutual Fund Research and Consulting LLC of New York. Reversing seven straight months of net redemptions, net inflows into stock funds totaled $7 billion last month, according to estimates from Strategic Insight's Simfund database. Inflows were experienced in both domestic- and international-equity funds — $5 billion and $2 billion, respectively. What does it mean? "As we distance ourselves from the extreme anxiety of the fourth quarter into more-normal, above-average anxiety, the inclination to redeem assets has declined," Mr. Nachmany said. But it is still premature to declare a return to normalcy. "One point does not make a trend," Mr. Nachmany said. "There is still a lot we need to get through." Even one month of positive flows, however, is encouraging, Mr. Nachmany said. "The point is, deviation from normal shareholder activity has declined," he said.