Investor Appetite for Equities Remains Anemic

Equity markets ended the month lower again in September, data from Strategic Insight, an Asset International company, shows. While small and mid-cap stocks were hardest hit during the month, the declines sent one-month average fund returns negative for U.S. equity (-3.2%) and international equity (-3.6%). Taxable bond fund average returns were also in the red, returning -0.7%.

Long-term mutual funds and exchange-traded products experienced net redemptions totaling $16.6 billion in September. Monthly net outflows from equity products totaled $6.9 billion, on $10.7 billion of net redemptions from U.S. Equity. Driven by outflows from diversified active large-cap funds, active U.S. equity mutual funds saw outflows of $14.7 billion in the month. International equity funds captured $3.8 billion in September, a drop from July’s $24.4, with index mutual funds netting $5.6 billion.

Taxable bond funds redeemed a net $9.4 billion in September on outflows from global and high yield strategies. Government short maturity funds netted $3.3 billion during the month. Despite quarterly outflows of $27 billion from bond funds, year-to-date bond mutual funds and exchange-traded funds (ETFs) have attracted $46.9 billion.

Net redemptions from money market funds totaled $11.5 billion in September.

More information about Strategic Insight is at www.sionline.com.