Stock funds posted outflows of $29.04 billion in September, making it the worst month on record and the third month this year in which stock funds have posted net outflows, according to the Investment Company Institute.
Until September, March had been the worst month on record with $20.67 billion in outflows, according to the ICI. But the prolonged bear market coupled and the September 11 terrorist attacks had an impact on investors and reflect their reaction, the ICI said.
Domestic stock funds had an outflow of $27.04 billion for the month, while world equity funds lost a net $2.47 billion. New stock fund sales amounted to $48.88 billion while redemptions and net exchanges totaled negative $65.75 billion and negative $12.65 billion, respectively.
So far this year, stock fund flows have been down sharply compared to last year. Year-to-date flows amount to $13.47 billion compared to $273.52 billion for the same period last year.
Hybrid funds lost $1.25 billion for the month in outflows, up from the $733 million in outflows they posted in August. Still, hybrid fund year-to-date flows total $4.49 billion, a marked improvement over the $28.23 billion in outflows they posted for the same period last year.
On the positive side, taxable bond funds attracted $7.96 billion in flows in September, down from the $13.73 billion they attracted in August. Year-to-date, taxable bond funds have attracted $59.21 billion, up from the negative $30.87 billion they lost for the same period the year before.
Municipal bond sales totaled $3.73 billion in September, but redemptions and net exchanges totaled a negative $3.65 and negative $413 million, amounting to a net outflow of $335 million.