Maybe investors aren't so afraid of stocks. They’ve consistently pulled money out of stock mutual funds since the 2008 financial crisis, but that doesn't tell the entire story.
So far this year, stock exchange-traded funds have attracted a net $87 billion while $17 billion has flowed out of stock mutual funds. As a result, overall investment in stock funds has increased, rather than decreased.
That was the case in September. Net withdrawals from U.S. and international stock mutual funds totaled $17.3 billion, according to the consulting firm Strategic Insight. By comparison, stock ETFs took in net deposits of $87 billion. That suggests investors still see value in stocks.
ETFs bundle the investments that are in a particular market index. Many investors hold them long term, like mutual funds. But ETFs can be traded just like stocks. They emerged 20 years ago as a trading tool for professional investors, but their low costs and index investing approach are drawing more average investors. Strategic Insight estimates about 60 percent of money in ETFs comes from individual investors and 40 percent from institutional investors.
As for bond mutual funds, they have attracted cash 13 months in a row. Their net deposits through September totaled $223 billion, more than three times the intake for stock ETFs and mutual funds.
Associated Press
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