Equity funds experienced their 10th consecutive month of net inflows in December, but it was the smallest amount the group had seen since May. Equity funds pulled in $15.5 billion in the final month of the year
Leading the way for equity funds were U.S. diversified funds with net inflows of $6 billion, trailed by mixed and miscellaneous funds at $4.8 billion and world equity at $4.3 billion. For the year, Lipper estimates that equity funds grabbed more than $180 billion, the best showing since 2000.
"Decembers holiday season diverts investor attention to other uses of time and money, but the drum beat of scandal news was also negative on psychology despite the smooth rise of stock prices last month," said Don Cassidy, a senior Lipper analyst, in a statement. "December numbers are also affected by tax selling and distribution avoidance, so we never place major emphasis on significance of the one-month data."
Combined, net flows for major fund types saw $10.8 billion walk out the door, with money markets losing $21.2 billion and other fixed income dropping $5.1 billion.
Lipper said that exchange traded funds jumped their assets by 10.5% in the month, gaining nearly $14 billion. Lipper noted their generally non-susceptibility to market-timing arbitrage trades.
"Investors have taken their time warming up to ETFs, but the trading scandals have given them an incentive to ramp up their learning curve. Some of the asset gains in ETFs are new money coming into equities, but the lions share is most likely being swapped out of mutual funds," Cassidy said.