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American Funds Overtakes Fidelity to Become No. 2: Stock, Bond Funds Reap $29B

After months of chipping away at the nation's biggest fund company, American Funds finally surpassed Fidelity Investments as the second-largest U.S. fund group in March, according to data from Financial Research Corp released last Wednesday.

With more than $671.8 billion in assets under management, American Funds has pulled ahead of Fidelity of more than $4 billion. FRC's monthly fund flow estimates also showed that among the top five fund shops, only the fourth-largest fund complex, Franklin Templeton Investments and PIMCO, No. 5, had greater net flows in March 2005 than they had in the entire first quarter of 2004.

Fidelity, on the other hand, after bringing in more than $13 billion three months into 2004, had less than $4 billion in net flows in the first quarter of this year.

Vanguard Group, which has also made sizable gains in the past five years of the bear market and the scandal, drew $17.1 billion into its funds in March, compared to $25.4 billion in March 2004. The company, like most others among the top 25, has drawn less money into its funds this year, thanks to the weak performance of the stock market.

Outflows at Putnam Investments, the maligned giant, were $1.8 billion in March compared to $2.2 billion in March 2004, when it was still embroiled in the deepest trenches of the scandal.