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Net Flows Into Retirement Accounts Increased $140 Billion, or 18%, in 2001


Although assets held in retirement accounts declined 4% last year, the net flow of $140 billion to mutual funds through retirement accounts in 2001 was up 18% from 2000, the Investment Company Institute reported.

The decline in assets occurred entirely in the equity fund category. However, net flows were positive in each of the fund categories. Overall, the net flows equaled about 25% of all net flows into mutual funds in 2001, the ICI said.

"Despite last year's market downturn, mutual fund investors maintained their long-term perspective," ICI President Matthew Fink said. "Saving for retirement continues to be a primary financial goal for the vast majority of mutual fund investors."

At the end of 2001, $2.3 trillion in retirement assets were in mutual funds, roughly 21% of the $10.9 trillion retirement market, according to the ICI. The remaining assets were held by pension funds, insurance companies, banks and brokerages.

Mutual fund assets within defined contribution plans decreased 6% to $1.1 trillion in 2001, but net new cash flow into those funds was $78 billion, up from $63 billion in 2000, according to the ICI. Mutual fund assets in Individual Retirement Accounts (IRAs) dropped 5% to $1.2 trillion. Net new cash from IRAs to mutual funds rose from $56 billion in 2000 to $62 billion in 2001.