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U.S. Equity Funds See Net Outflows For Second Month

By Tara Cantore editors@plansponsor.com | May 10, 2012
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May 10, 2012 (PLANSPONSOR.com) – Investors put only $26.5 billion in net inflows into stock and bond mutual funds in the U.S. in April 2012.  

This marked a decline from March, when investors put net $32 billion in flows into long-term funds, according to Strategic Insight (SI), an Asset International company.

In April, domestic equity funds saw net outflows of nearly $6 billion during a month of lackluster demand for U.S. stocks: the benchmark S&P 500 Index generated a total return of -0.6% in April amid trading volumes that were down more than 8% from the trailing 12-month average. That brought total U.S. equity fund flows to -$6 billion for the first four months of 2012—a sharp reversal from the first four months of 2011, when U.S. equity funds enjoyed cumulative net inflows of $41.9 billion.

International and global equity funds offered some relief, drawing net inflows of $10.4 billion in April—the best month for such mutual funds since March 2011. In the first four months of 2012, international equity funds drew aggregate net inflows of $26.5 billion.

“Investors remain in a holding pattern, as economic growth rates declined or turned negative in a number of key markets,” said Avi Nachmany, SI’s director of research. “The fragile state of investor confidence will benefit bond fund inflows in the near future as investors stayed centered on income strategies.”