Magazine article Newsweek

Focus on Your Money

Magazine article Newsweek

Focus on Your Money

Article excerpt

MUTUAL FUNDS Stock-Fund Seepage...

Investors pulled $12 billion out of stock funds in February and March, according to data compiled by AMG Data Services and the Investment Company Institute. The two-month exodus represented the biggest withdrawal from stock funds since Russian and Asian currencies collapsed back in August 1998--and showed investors' chagrin with a market that over those two months gave up 15 percent of its value.

Investors put $6.2 billion back into stock funds in April, a drop compared with last April's $33.8 billion. Pros are divided on how to interpret the data: it's either a sucker's rally on the way down, or a happy sign that the bottom's been hit. ... New Fund Flood The market's slide didn't dampen investors' enthusiasm for a relatively new type of mutual fund. While they were selling traditional stock funds in March, investors were buying $8.9 billion worth of exchange-traded funds, reported the Investment Company Institute. Unlike ordinary mutual funds, which are sold directly by their issuers and priced once a day, ETFs are traded on the American Stock Exchange and can be bought and sold at market prices all day long, albeit with commissions.

Investors love ETFs because they act like index funds but are generally much cheaper to hold over the long term. Because of those commissions, however, they're more expensive to trade and are best for long-term investors.

MONEY MACHINES New Banking Hours: From 7 a. …

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