Some bank brokerage executives are reporting healthy fund sales in November, despite a 57.94% drop in the industry's net inflows into stock and bond funds.
Inflows - sales minus redemptions - totaled $4.5 billion in November, down from $10.7 billion in October and $20.1 billion in November 1998, according to a study by Financial Research Corp.
"Investors are spending their money rather than saving it," said David Haywood, director of research at the Boston-based firm. November and December are often slow months for fund sales because of Christmas, Mr. Haywood said.
Despite the precipitous drop, November's sales figures are up 66.7% from September, when they totaled $2.7 billion. Mr. Haywood attributes the increase to investors' appetite for technology funds. That sector accounted for $6.2 billion of sales in November, compared with $2.9 billion in October, he said.
Domestic equity and international/global funds continued their favored status in November, taking in $7.7 billion and $1.3 billion, respectively. Fixed-income funds, by contrast, had outflows of $4.5 billion, Financial Research said.
Stephen Angelis, brokerage chief at CCB Financial Corp. of Durham, N.C., said technology and growth funds accounted for a large chunk of his firm's November sales, which jumped 17% from the previous month. By contrast, fund sales fell 5.25% from September to October, he said.
Richard W. Smiley, president of Unionbancal Corp.'s brokerage division in Los Angeles, said fund sales topped $60 million in November, an increase of 100% over estimates and nearly double October's sales. He attributes the increase to a strong market and an annual fourth-quarter sales contest.
Nonetheless, Richard B. Ille, national sales manager for Fifth Third Bancorp's proprietary fund family, said November was "mediocre" because brokers are hesitant to sell funds before capital gains are distributed. Sales of the Fifth Third Funds in November totaled roughly $11 million, compared with an average of $15 million in other months, he said.
Meanwhile, nonbank funds continued to dominate the best-selling fund groups. Janus, which had inflows of $4.6 billion, remained the top-selling fund company, its second consecutive month in that slot. Vanguard Group Inc. ranked second, with inflows of $1.6 billion, according to Financial Research.
