It’s no coincidence that the decline in net flows into stock mutual funds coincides with the popularity and rise of exchange traded funds (ETFs). Some finance experts believe that a growing interest in international funds, ETFs and life-cycle funds is a reason for the decline in stock funds. Using the money to buy a home could be another reason for the shifting of large dollar amounts, reports Sue Asci for Investment News.
Net flows into stock mutual funds are at about $11 billion per month, which is down from a $50 billion peak seen in January 2000, according to fund tracker Lipper. New cash flowing into stock funds is at a dismal level not seen since 1994. Mutual funds that invest in U.S. companies appear to be hit the hardest. Net flows into U.S. stock funds are at about zero dollars per month, on average, which indicates that investors are taking out as much money from the funds as they’re putting in.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.