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Investors Re-Embracing Stocks, Record Amounts For Balanced Funds

ByMingze Wu
Published 05/28/2013, 02:27 AM
Updated 07/09/2023, 06:31 AM

Investors are pumping record amounts of money into U.S. balanced funds, whose freedom to buy stocks and bonds made them barometers for gains in the biggest bull markets of the past half century.

Managers led by Capital Research & Management Co. and Invesco Ltd. received $35.2 billion from January to April, the most in any four months, according to data compiled by Bloomberg and the Washington-based Investment Company Institute. Assets in the funds increased 3.6 percent, compared with 1.2 percent for those that only buy equities.

While valuations and trading volume show individuals burned in the financial crisis have been slow to join the record-breaking rally in the Standard & Poor’s 500 Index, the growth of funds that now balance more than $1 trillion of stocks and bonds shows the reluctance is easing. Deposits with hybrid funds reached records in February 1994 (SPX), when the S&P 500 was in the middle of a 417 percent gain, and in April 2004 amid a 101 percent rally.

“It shows the early stages of the healing process and reduction in this still pervasive negative psychology about the stock market,” Michael Holland, chairman of New York-based Holland & Co., which oversees $4 billion, said in a May 22 phone interview. “We’re four years into a bull market and levels of stock ownership remain very, very low.”

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