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Investors Pull Record Dollars From Market

Stock Fund Outflows Set Record in July

NEW YORK (Reuters) - Investors pulled a record $49.0 billion from U.S. stock mutual funds in July as all major stock indicators fell sharply and the average diversified stock fund lost nearly 10 percent, fund data and research firm Lipper Inc. said on Monday.

The monthly net redemptions from stock funds were the largest on record in dollar terms, topping the $30 billion in net withdrawals in Sept. 2001.

The July outflows represented 1.6 percent of stock fund assets, which total about $3 trillion. On a percentage basis, the outflows were not of record proportions. In Oct. 1987, when stocks crashed, outflows as a percentage of assets set a record at 3.17 percent.

July was the second consecutive month of net redemptions from stock funds. By Lipper's estimate, stock funds saw outflows of $13.8 billion in June. Flows to stock funds were positive in each of the eight months from Oct. 2001 to May 2002.

Bond funds took in a record $19.2 billion in July, Lipper said. The old record for bond funds was $15.4 billion in Aug. 2001. Money market funds took in $31.0 billion. Lipper is a unit of Reuters Group Plc .