Funds lose $29B last month, most in 3 years

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Investors pulled more money out of stock and bond funds in October than in any month in more than three years.

Mutual funds and ETFs had net redemptions of $29.1 billion last month, the biggest outflows since August 2015, according to a report Tuesday by Morningstar. The data exclude money market funds.

The rout in global markets is turning investors cautious. The S&P 500 fell nearly 7% in October and the Bloomberg Barclays U.S. Aggregate Index lost 0.8%. Yet fixed-income funds were hit worse than equities, Morningstar said.

Taxable bond funds experienced $14.2 billion in redemptions, their worst performance in almost three years, while equity funds had outflows of $2.2 billion. Active funds experienced $46 billion in redemptions, the most since December 2016, and passive funds brought in $16.9 billion, the data show.

The October outflows were the most severe since the summer of 2015, the last time the U.S. equity market was in a correction, Morningstar analyst Kevin McDevitt wrote.

Bloomberg News
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