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Cash Flow 2000 - 2nd Quarter Update

As a follow up to last quarter’s cash flow report, Hueler’s 2^nd QuarterFIRSTSource Market Data, which encompasses 400 plans, $100 billion in stable value assets and $508 billion in plan assets, shows improved cash flows as anticipated. As discussed in the last issue, January and February resulted in heavy outflows with total withdrawals as a percent of stable value assets averaging -4.42% in January and -2.83% in February. Additionally at the extreme end, outflows for those months were -11.2% and -7.6% respectively.

As seen in the table below, the negative trend broke during the month of March showing that average flows were only slightly negative -.09%. Second quarter 2000 results looked much more like third quarter 1999 with average flows being close to neutral and the extreme ends ranging from –2% to –4% (see Table 1).

Stable value is actually well positioned to receive inflows, with average stable value one-year returns hovering around 6.35% as compared to the Lehman Intermediate Government/Corporate’s 4.23% and even the S&P’s 7.25%. We’ll see what happens! Hueler Companies will continue to monitor cash flow statistics from the FIRSTSource Market Data and report out new trends that appear in future issues.

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