Mutual fund sales at bank brokerages have started to rebound as investors regain confidence in the stock market, bank brokerage chiefs reported.

"People are getting more confident that we have gotten through a significant correction," said Mike Mortensen, president of PNC Bank Corp.'s retail brokerage. "They are thinking, 'I'd better get in while it's still cheap.'"

Though PNC's fund sales were down 18% from their usual level in September, in October the sales shortfall closed to 5%, he said.

At Centura Bancorp's retail brokerage in Rocky Mount, N.C., sales plunged to 30% of normal levels in July and August. They have bounced back to normal levels but have not erased the summer setbacks.

"July and August were just abysmal-people sat on their hands and didn't do anything," said Ed Hipp, president of the brokerage. "People are a little more confident in the future now."

Sales figures for the entire mutual fund industry-including sales through banks, nonbank brokerages, direct sales via telephone, and other distribution channels-seem to bear that out.

Net new sales of all kinds of mutual funds in September were $11.7 billion, compared with a net outflow of $7.2 billion in August, according to the Investment Company Institute, the fund industry's main trade group.

The ICI reported that net sales of stock funds totaled $6.5 billion in September after these funds lost $11.7 billion the month before.

Projections for October have painted an even brighter picture. According to TrimTabs.com Investment Researchin Santa Rosa, Calif., net sales of stock funds should be $9.1 billion in October, while combined sales of bond funds and hybrid funds should rise to $7.3 billion, from $5.2 billion in September.

Still, overall stock fund sales are running well below the $21 billion a month they averaged from January through July.

And investors seem to be hedging their bets more by buying bond funds along with those stock funds.

October figures for sales of bond funds and hybrids are expected to equal about 80% of stock fund sales. In the same month last year, bond and hybrid fund sales ran at just one-fifth of equity fund sales, according to TrimTabs.

But after investors at PNC embraced bond funds, they have started to favor stock funds again. In September, bond funds outsold stock funds 55% to 45%, but over the past two weeks equity funds have been outselling bond funds 60% to 40%, which is close to the normal ratio, said Mr. Mortensen, the brokerage president.

The strengthening stock market appears to be drawing investors back into the world of long-term funds and out of short-term money-market funds.

Net new cash flow into money market funds, which hit a record $50.4 billion in August, fell to $7.4 billion in September, according to the ICI.

Michael Vessels, the head of bank sales for Aim Management Group in Houston, said sales through banks showed a turn to bond funds during the market volatility that began in mid-July.

The ratio during that tumultuous period went from the normal 85% stock fund sales and 15% bond fund sales to 70% stock funds and 30% bond funds.

But over the last couple of weeks the ratio has returned to about normal, Mr. Vessels said.

"Now that people feel we've seen the bottom, it's a safer time to be going back in," he said.

Another factor driving stock fund sales may be the shrunken prices of many stocks. Prices of large consumer stocks in particular were hit hard during the third quarter, which was the stock market's worst quarter in eight years.

"I think customers are actually starting to understand that when the market does what it does, that's a good time to buy in," said Pamela Dawson, president of Seattle-based Washington Mutual's retail brokerage.

Its executives have been reminding sales reps that they should be making the case for investing now, when the market is off its peak, Ms. Dawson said.

"We're reminding them that now is the time we should be doing a lot of business," she said.

September was one of the better months for sales this year at the brokerage, but the $8 million in sales commissions was still 10% below the company's "aggressive" goal for the month. Ms. Dawson said.

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