Fund inflows continued to climb for the third straight month, and Manhattan-based consulting and research firm Strategic Insight is heralding this boost in assets as a harbinger of long-term success for the fund industry. According to Strategic Insight and ICI data, the second quarter saw total net inflows of roughly $136 billion into bond and stock mutual funds, and net inflows to ETFs added another $14 billion in assets. This is the best level of quarterly net inflows since the first quarter of 2007, when stock and bonds funds drew in nearly $150 billion.

Loren Fox Strategic Insight Senior Research Analyst

Bond funds alone drew in $90 billion in the second quarter, and most of that money went into taxable bond funds. Equity funds drew in approximately $47 billion in net flows, and roughly $15 billion of the total equity inflows went towards international stock funds.

The data, Strategic Insight notes, can be seen as a sign that equity funds are poised for a long-term recovery.

"Including June, equity funds have now enjoyed three straight months of solid inflows. Investors are tiptoeing back into riskier asset classes," said SI senior research analyst Loren Fox. "And while the recent stock market retreat slowed equity fund inflows, they would rebound if the second half of 2009 experienced an economic recovery." 

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