The second possible explanation for
the outflow of equity mutual funds is retirement.
And so, he did extensive research including the research from Dalbar, taking a look at the inflows and
outflows of equity mutual funds of the average individual investor.
Not exact matches
Since 2007, U.S.
equity mutual funds and exchange traded
funds have suffered net
outflows to the tune
of $ 250 billion while close to $ 1.6 trillion have flowed into bond
funds — wow.
To put this in context, the flows out
of U.S.
equity mutual funds and exchange - traded
funds in the past 18 months have exceeded the cumulative
outflows between 2008 and 2012, the wake
of the financial crisis.
The observed cash
outflow indicates that average
mutual fund investors have gradually cut back their
equity positions since the beginning
of last year.
And
of course, when markets are at their peak, as we see today, we're seeing more and more inflows
of equity type
mutual funds, and when markets go down, then we see a lot
of outflows of equity type
mutual funds, so we're doing the exact opposite
of what we should be doing because
of the emotion that's involved with our money.
Indeed, amongst US
equity mutual funds, only the lowest fee decile garnered positive net flows over the course
of 2016, with all other deciles experiencing net
outflows.
Equity mutual funds had net
outflows of just over $ 1.0 billion for the week.
Below are four possible reasons for the
outflow of funds from
equity mutual funds:
Touching on new
fund flows first, March saw more than $ 2 billion
of new asset flow into alternative
mutual funds and ETFs, while US
equity mutual funds and ETFs had combined
outflows of nearly $ 6 billion.