Reverse Flow: Money Gushes Into Value and Bond Funds in 2001

This marks a stark turnaround from the big growth and tech days of yesteryear.
By Ian McDonald ,

Fund investors continue to broaden their menu beyond the tech and growth funds that captured nearly every investor's imagination and money in 2000.

Investments into U.S. value funds have outpaced redemptions by $36 billion so far this year, compared with $1 billion for growth funds, according to a Wednesday data release from New York fund consultancy

Strategic Insight

. Bond funds are even more popular, with a $38 billion net inflow through June 30.

Given that value and bond funds are leading growth funds over the past year, these cash flow data aren't a surprise, but they are welcome. With the average tech fund down more than 57%, it seems that investors who gorged themselves at the

Nasdaq buffet

might be well served to diversify among less techie funds.

A comparison of the fund flows in the first half of this year with the same period a year ago might provide the starkest portrait of investors' rising attention to risk and diversification. Through the first six months of last year, growth funds took in a whopping $167 billion, while value and bond funds were in net outflows. This year, the tables have turned.

Fund Junkie runs every Monday and Wednesday, as well as occasional dispatches. Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

imcdonald@thestreet.com, but he cannot give specific financial advice.

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