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Mutual fund assets fall nearly 3% in November

The nation's mutual funds saw holdings shrank by $262 billion last month, falling at a slower pace than they did in October.

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By Lara Moscrip, CNNMoney.com contributing writer

What was the biggest business news story of 2008?
  • Auto industry meltdown
  • Bailout of Wall Street
  • Foreclosure storm
  • Oil price's wild ride
  • Stock market meltdown
  • It's official: U.S. in recession
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NEW YORK (CNNMoney.com) -- The combined assets of the nation's mutual funds decreased by nearly 3% in November, according to a report released Tuesday.

Since the start of the recession in December 2007, the combined assets of U.S. mutual funds have fallen 22.2%, according to the survey from the Investment Company Institute, a national association of U.S. investment companies.

The mutual fund assets, which include stock funds, hybrid funds, bond funds and money market funds, decreased by $261.65 billion to $9.355 trillion between October and November, according to the report.

Long-term funds, which include stock, bond and hybrid funds, saw $41.31 billion leave their coffers in November. However, that decline was just one third of the $127.55 billion that exited long-term funds in October.

Investors were spooked in October when the Treasury Department, a week after Congress approved the $700 billion bailout plan, switched gears from its initial intent to buy up banks' mortgage-backed securities and instead decided to make equity-stake purchases in banks. The market shunned Treasury's strategy shift.

In the eight market sessions that spanned the first 10 days of October, the Dow fell 22%, a drop not seen since the 1930s.

Among the long-term funds, stock mutual funds saw the largest outflows in November. These funds posted an outflow of $21.74 billion in November, down from an outflow of $72.44 billion in October.

After stock mutual funds, the second greatest outflows came from taxable bond mutual funds, which were down $13.36 billion in November, compared with a dip of $32.36 billion in October.

There were about 8,000 mutual funds surveyed in this report, virtually the same number surveyed in October 2008.  To top of page

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