Bond Funds’ Net Inflow Tops Stock Funds

Stock mutual funds posted meager net cash inflows in August as investors turned wary of the equity market.

The funds had a net inflow of $1.1 billion, down from $9.4 billion in July, the Investment Company Institute said Wednesday. Net inflows measure purchases minus redemptions.

Major stock indexes fell to nine-month lows in mid-August, discouraging fund investors.

But bond mutual funds had a net inflow of $4.2 billion in August, compared with an outflow of $1.2 billion in July, according to the institute, the industry’s chief trade group. Falling market interest rates in August boosted the value of older bonds, driving bond fund share prices higher. The rally attracted investors.

Among fund companies, Los Angeles-based American Funds remained the most popular. The company’s stock and bond funds took in a net $5.5 billion in August, according to data tracker Financial Research Corp. Vanguard Group ranked second, with a $3.2-billion inflow.