click for larger chart

>

The Financial Times:

US equity funds see biggest outflows of 2012: US equity funds suffered their worst outflows of the year in the week to Wednesday as investors became decisively risk-averse following a five-day losing streak for US equities. The S&P 500 fell 4.3 per cent in the five trading days to Tuesday, giving back a third of its gains from a stellar first quarter, although it has since regained some of that ground. Investors responded by withdrawing more than $7bn from US exchange-traded and mutual funds that invest in equities, the largest outflow since mid-December, and equivalent to almost 1 per cent of the assets invested in such funds, according to data from Lipper. It was the third successive week of outflows from equity funds and by far the largest.

>

Comment:
The story above refers to Lipper data.  The chart above shows Investment Company Institute (ICI) data.  Although they are two different sources, they generally tell the same story.

While domestic outflows (second panel in green) are the largest of 2012, they still pale in comparison to the outflows of last summer.

Category: Investing

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “Stock Mutual Fund Outflows Increase”

  1. Sechel says:

    Investors don’t trust the market and thing it’s rigged.
    Could not help but think they are on to Q.E. & then this week you had Goldman being fined for “assymetric information sharing” by the SEC and today you have Google coming up with an usual stock split that strips stock holders of voting rights.

  2. rd says:

    The muppets aren’t buying Goldman Sach’s “Buy Equities Now” recommendation.

    After going from the frying pan to the fire over the past 12 years, they are starting to see a pattern in the menu – they are realizing that they ARE the menu.

    “To Serve Man (or Muppets)”

  3. SivBum says:

    Since S&P had the best 1Q since 1998, all the outflow must have gone into the market via other channels, notably index and ETF funds.

  4. super_trooper says:

    How does this look like if you plotted ETFs?

  5. bonzo says:

    Money can’t flow into or out of the secondary stock market as a whole (disregarding corporate buybacks/issuance), because for every seller there is a buyer. Perhaps money leaving mutual funds reflects strong buybacks, or it might reflect small investors moving from mutual funds to ETFs, or it might reflect small investors selling out to institutions. The charts above don’t say what is really happening.

  6. jeffg says:

    super – that is an excellent point – even my 80 yr old Dad withdraws money from mutual funds from his IRA and if he doesn’t need it all, he reinvests it in a dividend ETF. I think mutual fund inflows are an obsolete metric for that reason, who goes to a broker and buys mutual funds any more?

  7. rd says:

    Interestingly, the percentage of 401ks that are invested in mutual funds increased from 2000 to 2010Q4 while the percentage in IRAs stayed about the same: http://www.ici.org/pressroom/news/ret_10_q4

    It is difficult to invest in anything but mutual funds and GICs in most 401ks. Few 401ks contain ETFs. It is easier to have a brokerage account for an IRA where ETFs could be traded.

    It is more likely that the constant trickle from equity mutual funds is a real move by the dumb money.

  8. Iamthe50percent says:

    Is this a contrarian signal? If retail buyers are cashing out, is time to buy based on the herd always doing the wrong thing?

  9. Frilton Miedman says:

    We’re back to the age of bucket shops and Teddy Roosevelt, where stereotypical family values included looking on the stock market as a place for those of questionable moral character or unsound financial aspirations.

  10. philipat says:

    The dumb money isn’t so dumb any longer. The TBTF Banks will continue to pump up the market in an attempt to attract the dumb money back again. When that doesn’t work, watch out below because they will cover the losses with naked shorts, accelerated by HFT. The markets are totally rigged.

  11. javelin says:

    Is it possible that because people can no longer earn anything in bank deposites, CD’s etc. that withdrawls of “cash” come out of the stock market, skewing the data interpretation?

  12. [...] addition, Barry Ritholz pointed out that funds flows into equity mutual funds have turned negative again, indicating that [...]