Equity Mutual Funds Continue To Hemorrhage Cash

Continuing a trend we’ve been seeing for quite some time, investors continue to pull money out of equity funds (and money market funds), and put that cash into fixed income/credit.

Goldman Sachs (via ShiftCTRL Group) Credit, non-US stocks gain flow share in 4Q For the week ending 11/4, Lipper FMI data and our
preliminary estimates suggest equity funds remained in the outflow mode, shedding
another $3 bn, which was once again led by domestic funds. This compares to $1.5 bn of net
outflows ($2.6 outflows in domestic and $1.1 bn in international inflows) reported by ICI for the
week prior.  

Conversely, bond fund flows remained solid at an estimated $7.4 bn for the current week,
following $10.2 bn (comprising $8.9 bn bn in taxable bonds and +$1.3 bn in munis) for the prior
week reported by ICI. 

MMFs outflows accelerated once again, reaching $21 bn for the current week. As we
approach the middle innings of 4Q, MMFs lost $79 bn qtd, tracking in-line with 3Q’s total
outflows of $235 bn. Similarly to 3Q, credit remains the only game in town with over +$50bn
of inflows qtd, on track to beat last quarter’s record. Domestic equity funds outflowed $17 bn,
while international funds continued to gain share, picking up +$7bn 4QTD. 

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