Equity funds experienced net outflows of $13.8 billion in June, according to estimates reported today by
Furthermore, the $45.8 billion in net outflows from all mutual funds appears to be a record high, Lipper reported.
"Open-ended uncertainties about corporate financials credibility, potential major bankruptcies and international developments were a heavy burden for equity fund investors in June," said Donald Cassidy, a senior research analyst at Lipper. "Overlay on that the grinding disappointments and losses of a 27-month bear market, and many found it too much to bear."
Conversely, bond funds experienced $18.0 billion in inflows in June, the most in one month, Lipper said. June is typically a weak month for money-market fund flows, and this year was no different. Money funds had a net outflow of $50 billion, driven primarily by their low interest rates, especially compared to short- and intermediate-term bond funds, according to Lipper.
"Investors rising intolerance for equity-market losses and the low level of return available on money-market choices combined to move money towards bond funds in June," Cassidy said. "People wanted safety, and current cash return was a big attraction."
Of the $13.8 billion that flowed out of equity funds, $12.7 billion came from U.S. diversified funds, according to Lipper. Among those, large-cap growth funds were hit hardest, with $3.6 billion in net outflows.
Of the $18 billion of bond fund inflows, $15.2 came in short- and intermediate-term funds, according to Lipper. For money funds, 93% of the outflow came from institutional funds.
