Fund Investors Pull $56 Billion in Biggest Exit Since 2008
Mutual funds suffered redemptions of $56.2 billion in the week ended Dec. 19, the biggest outflow since the week ended Oct. 2008.
(Bloomberg) -- Investors are bailing out of mutual funds as if it were 2008.
Mutual funds suffered redemptions of $56.2 billion in the week ended Dec. 19. That’s the biggest outflow since the week ended Oct. 15, 2008, according to data released Wednesday by the Investment Company Institute. And the numbers over the last several weeks have only gotten worse as the chart below shows.
Yet even as investors were dumping mutual funds last week, they added $25.2 billion to exchange-traded funds. And a group of optimists -- corporate insiders -- have stepped up their buying over the past two months.
The exit from funds came as stocks have plunged on fears of a slowing global economy and President Donald Trump’s criticism of Federal Reserve Chairman Jerome Powell. The S&P 500 index lost 5.4 percent in the week ended Dec. 19.
Here’s the breakdown of the funds investors pulled money from:
| Fund Type | Week Ended Dec. 19 |
|---|---|
| Total equity | -$27.04B |
| Domestic equity | -$12.68B |
| World equity | -$14.36B |
| Hybrid funds | -$9.56B |
| Total bond | -$19.6B |
| Taxable bond | -$18.47B |
| Municipal bond | -$1.14B |
Pointing to the flow of money into ETFs, ICI Chief Economist Sean Collins said in a statement that it reinforced the view that “some investors view periods of volatility as a buying opportunity.”
To contact the reporter on this story: Charles Stein in Boston at cstein4@bloomberg.net
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella, Josh Friedman
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