Sunday, February 21, 2010

Investor Fund Flows Favoring Fixed Income Investments

The below chart notes the change in fund flows for the broad mutual fund asset classes of equity, fixed and money market funds. If the line is above the "zero" x-axis, then the respective asset class saw positive fund flows for the period in question. For the periods earlier than 2010, the data is monthly.

The chart shows fixed income funds have generated positive investment flows since September of last year. During that same time period, equity funds saw outflows except for a brief period in early January of this year. The negative flow in money market cash has been driven mostly by institutional investors. Retail investors have actually added to their money market funds since the beginning of February. Is this a contrarian sign?

Investors interested in reviewing the data for a longer time period, the Investment Company Institute website contains more detail on flow data.

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