The mutual fund industry's assets under management declined in July for the third month this year, as stock market declines and soft sales took their toll.

Assets under management in stock and bond funds fell 1%, while assets in money market funds rose 2%. Combined assets fell 0.7%, to $6.031 trillion, the Investment Company Institute reported.

The decline indicates the industry may be in for a two- to three-year lull, said Geoffrey H. Bobroff, a consultant in East Greenwich, R.I. "The low-hanging fruit days are behind us," he said.

Stock mutual funds, the biggest asset class, suffered a big drop in net sales as investors took out $6.8 billion more than they put in. Assets in stock funds dropped 2% overall in July. Mutual fund assets also fell in February and May. Last year mutual fund assets declined in two months, May and August.

-- Stephen Garmhausen

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