Investing April 24, 2001

Equity Funds Suffer Record Outflows in March

April 24, 2001 (PLANSPONSOR.com) - US investors reacted to a slumping stock market by pulling a record $15.4 billion out of stock mutual funds last month, according to Lipper.
Reported by

That topped the previous record monthly net withdrawal set in August 1998. More ominously, it was the first back-to-back monthly net withdrawal from stock funds since August and September 1990- when Iraq’s invasion of Kuwait spooked investors- according to the mutual fund tracking firm.

March’s outflow comes on top of an outflow of $2.4 billion from stock funds in February, according to Lipper’s data.

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Put In Perspective

In October 1987, the net monthly outflow from U.S.-based stock funds was around $8 billion, roughly equal to 5% of fund assets at the time. However, with $3.7 trillion now invested in US stock funds, March’s withdrawal constitutes just 0.4% of assets.

Money market funds also suffered a net outflow of roughly $4 billion, according to Lipper.

Among US equity categories,

  • Large cap funds lost $7.1 billion
  • Multicap funds lost $1.2 billion
  • Small cap funds gained $800 million

Global equity funds suffered a net outflow of $4.4 billion in March.

On the other hand, bond funds experienced their third straight month on net inflows, gaining an estimated $6.2 billion during March according to CBSMarketWatch. The consecutive monthly inflows followed 18 consecutive months of outflows.

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