Latest Mutual Fund Deposits Favor Growth
Investors continue to pour money into U.S. stock mutual funds, according to an industry research report.
An estimated net $5.31 billion funneled into equity funds in the one-week period ended Monday, up from about a net $945 million in the prior week, according to Trim Tabs Financial Services Inc., which tracks mutual fund money flows.
A big chunk of the fresh investments in the latest week, or about $3.04 billion, went into “growth” and “aggressive growth” stock funds, Trim Tabs reported.
The more conservatively managed “growth and income” funds attracted a net $1.54 billion in the week ended Monday.
By contrast, international stock funds attracted a net $765 million in the week ended Monday, according to Trim Tabs.
As for bond funds, investors were net buyers of municipal bond and junk bond funds in the latest week, and net sellers of government bond funds, according to Trim Tabs.
Bankruptcies jump 19 percent
More Americans filed for bankruptcy in 1997 than ever before, federal court officials reported Friday.
More than 1.4 million bankruptcy petitions were filed - up about 300,000, or 19 percent, from the 1.17 million filed in 1996.
The data released by the Administrative Office of the U.S. Courts showed that some 1.35 million individuals and 54,000 businesses sought protection from creditors in federal bankruptcy courts last year.
Figures obtained from the Bankruptcy Courts in Spokane and Boise earlier this year showed a 22 percent increase in Eastern Washington and a 30 percent increase in Idaho’s four northern counties.
Typical 401(k) has eight funds
How’s your 401(k)? How does your company’s 401(k) compare with plans offered by other employers?
A new study by Hewitt Associates, the management consulting firm, finds the average plan now offers eight investment options, up from 4.5 in 1993 and 6.3 in 1995. The survey looked at 460 employers with 2.8 million participants.
About 90 percent of the plans included contributions from the employer. Employers most commonly contribute 50 cents for every dollar put in by employees.
About 59 percent of employers said they provided formal investment education to help employees manage their 401(k)s.
Nine in 10 plans let employees borrow against their 401(k)s.
Plans have gradually become more flexible in allowing participants to change investments. Nearly eight in 10 plans allow an unlimited number of transfers during the year, and nearly two-thirds allow changes to be made on a daily basis.
Nike stock stumbles
Bloomberg Business News recently reported a rumor that super-investor Warren Buffett was adding to his stake in Nike Inc., the sports-shoe maker. Buffett’s Berkshire Hathaway Inc., already owns 4 million shares. Whether the rumor is true or not, Nike is worth a close look as a great business that investors currently dislike intensely.
Nike stock has tumbled $30 in a year and now trades at a P/E of 17. Detractors worry about Nike’s Asian markets and its less-than-glorious foray into athletic equipment. Marshfield Associates, a value-oriented money-management firm in Washington and a Nike fan, recently told clients, “The market has overreacted to short-term difficulties, and has underestimated long-term prospects.”