Investors Flee US Equity Funds in March

May 1, 2001 ( - US stock mutual funds suffered their largest monthly net cash outflow ever in March, more than $20 billion, according to the Investment Company Institute (ICI).

However, while that was the largest-ever outflow in dollar terms, it was just 0.56% of total stock fund assets.  In contrast, October 1987’s $7.48 billion outflow was more than 3% of total fund assets.  That month is now the third highest outflow on a dollar basis, after August 1998’s $11.58 billion net outflow.

Domestic “Bliss”?

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Most of the net outflow came from domestic equity funds, $15.72 billion, according to the ICI.  It was the first net outflow from domestic equity funds since August 1998, and a significant turnaround from the net $1.16 billion net inflow in February.

The net outflow from world equity funds in March was $4.88 billion, slightly more than the $4.46 billion outflow in February.

Money market mutual fund assets increased by $16.75 billion to $2.036 trillion in March, benefiting from a net inflow of $13.47 billion in March.

Bond funds picked up cash flow of $7.98 billion in March, compared with $8.84 billion a month earlier.  Hybrid funds, which include both stocks and bonds, had an outflow of $398 million in March, compared with an inflow of $1.17 billion in February.

The ICI data includes information from 8,255 mutual funds, up from a revised 8,194 a month ago.