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Five of the Hottest-Selling Funds: Buy or Bail?

A closer look at the most popular mutual funds.

Russel Kinnel, 08/04/2009

There was a time when the funds drawing the most inflows were a motley bunch of hot funds. But the bear market of 2000-02 got investors refocused on risk and costs, and since that time, the best-selling funds are generally a pretty good group. To be sure, some investors are still paying too much attention to recent returns, but they are generally not piling into the crazy stuff.

In the second quarter, the stock market came roaring back, and some fund investors have followed suit though, of course, they'd have been better off if they had stayed in rather than buying after the rally started. On the plus side, most fund money does stay put. There are trillions in mutual funds, and even in the most extreme months, you'll only see $20 billion or $30 billion in net inflows or outflows.

So, now that Karen Dolan has looked at the coldest-selling funds, let's look at the hottest sellers. How did they get here and should you join the masses and rush in? I should note that I pulled a few funds from the hottest-selling list rather than just use the top five because some of the best sellers are there because of fund-of-fund switches or share class issues and don't actually reflect new money from investors.

PIMCO Total Return PTTAX
1 Month ($Mil): 3,272
QTD ($Mil): 10,347
YTD ($Mil): 20,967

Vanguard Total Stock Market Index VTSMX
1 Month ($Mil): 1,199
QTD ($Mil): 2,775
YTD ($Mil): 5,774

PIMCO Commodity Real Return Strategy PCRDX
1 Month ($Mil): 574
QTD ($Mil): 2,524
YTD ($Mil): 3,860

TCW Total Return Bond TGLMX
1 Month ($Mil): 904
QTD ($Mil): 2,727
YTD ($Mil): 3,367

Templeton Global Bond TPINX
1 Month ($Mil): 989
QTD ($Mil): 2,385
YTD ($Mil): 2,736
Estimated Net Flow as of June 30, 2009

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