Record Outflows From Equity Mutual Funds

Earlier this week the Investment Company Institute (ICI) released weekly mutual fund flows for the week ending July 10th. Every single category of equity fund flows had outflows this week, which is relatively rare; of the 654 weeks with data since 2007, only 70 have seen that kind of consistency across all equity categories…and four of those have been in the past four weeks! Total equity fund outflows were $46bn this week, versus $6.8bn for the week and $85.4bn over the past three months. On a cumulative basis, $1.2trn has left equity mutual funds since January of 2007. 

With equity fund flows in the bottom quintile of all periods in recent weeks, bond funds have been the complete opposite story. As shown in the table below, bond fund inflows were in the 97th percentile overall this week and in the 94th percentile or higher in four different categories. The only areas that were at all weak were taxable global bonds and high yield bonds. On a cumulative basis, bond fund inflows total $1.7trn since the start of 2007, an interesting mirror image of the $1.7trn in domestic equity fund outflows since 2007.

The bottom line is that equity fund flows have been very large over the past year. As shown in the chart below, more than $320bn has flowed out of equity funds over the past year, more than any other 52-week period in the history of the day. Even at the height of the crisis, investors were pulling substantially less from funds.

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