Investors pulled about $20 billion from mutual funds and exchange-traded funds (excluding money market funds) for the week ended Wednesday, according to Thomson Reuters unit Lipper, marking the biggest weekly net outflows since August 2011, when markets were roiled by the U.S. debt downgrade and Europe’s debt crisis.
The outflows followed Fed Chairman Ben Bernanke’s comments last week, in which he outlined a preliminary timetable for the wind down of the central bank’s bond-buying programs. “Investors continue to be spooked by the thought of ‘tapering,’” says Matthew Lemieux, an analyst at Lipper.
Investors pulled a net $4.5 billion from weekly reporting municipal-bond mutual funds and ETFs, the largest such outflow on record. Investment-grade corporate-bond mutual funds and ETFs saw their second-highest net outflow on record, with about $2.32 billion exiting these funds.
Fund flows related to the stock market offered a mixed message. Investors pulled $6.6 billion from U.S. stock ETFs, with the bulk of the outflows ($3.6 billion) coming from the ETF market’s largest fund, the SPDR S&P 500 (SPY). ETFs often attract a hefty dose of “hot” money that flows in and out from traders and hedge funds. The weekly outflow was the biggest since April 24.
Conversely, investors sent $282 million into U.S. stock mutual funds, illustrating how mom-and-pop — the retail investors who predominantly invest in mutual funds — stuck with stocks amid the recent turbulence
