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Fund Investors Pull $56 Billion in Biggest Exit Since 2008

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Fund Investors Pull $56 Billion in Biggest Exit Since 2008

  • Stock, bond funds both saw redemptions for week ended Dec. 19
  • But ETFs attracted about $25 billion in the same period
With Stocks on Brink of Bear Market, Is It Time to Buy?

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.

Outflows Accelerate

Weekly redemptions for stock and bond funds surge

Source: Investment Company Institute

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.

Read more: Insider Buying Surges to 8-Year High as Stock Bear Market Nears

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 TypeWeek 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.”

(Adds weekly data in chart.)