Fund Investors Don’t Seem to Be Very Afraid

As they come off the biggest one-week drop in the stock market in a decade, mutual fund investors are exhibiting an eerie calm.

In fact, the nation’s largest fund companies--including Fidelity Investments, American Century Investments, Vanguard Group, T. Rowe Price Associates and Invesco Funds Group--say they haven’t noticed even an uptick in the number of calls to their phone centers, let alone any sharp increase in redemption activity.

There was “really no noticeable trend between buying and selling” over the weekend, said John Demming, spokesman for Vanguard, the second-largest fund company.

Added Colleen Noth, spokeswoman for Denver-based Invesco: “I think people are taking a wait-and-see attitude.”

That behavior contrasts with what went on last year, when investors pulled a net $11.6 billion out of stock funds in August 1998, amid a major slide in the global markets prompted by Russia’s bond default.

Last Thursday, a day after the Dow fell nearly 185 points, investors redeemed a net $516 million from stock funds, according to Carl Wittnebert, director of research for fund tracker Trimtabs.com. But he describes that figure as “very tame” relative to the historical levels of redemptions on days after big market losses.

Industrywide figures for Monday won’t be available until later this week. But some fund firms say that even with all the market worries of late--including the Dow’s 266-point drop Friday--they’ve still been seeing cash inflows, not outflows.

“Our equity fund flows [for October] already have surpassed our totals for all of August and September combined,” said T. Rowe Price spokesman Ed Giltenan.

Invesco reports seeing strong flows into its small-company and mid-cap stock funds, which are usually viewed as riskier than funds that invest in blue-chip issues.

Why aren’t fund investors more nervous? “One could speculate that investors have scaled back their expectations for stock fund performance,” Wittnebert said.

Chris Brown, analyst with Financial Research Corp., a research firm in Boston, said investors also may be clinging to memories of last year--when stocks quickly came roaring back in the fourth quarter after the deep late-summer slide.