Investors Lose Faith in Stocks As Billions Pour Out of Funds
Published: Tuesday, 20 Dec 2011 | 4:50 PM ET
Investors appeared to have lost faith in stocks this year.
Just over a week ago, equity mutual funds globally had the second-biggest one-day outflow of money in 2011, capping four straight weeks of net redemptions, according to data from EPFR Global.
Worldwide, investors have yanked $34 billion out of equity funds this year and put $75 billion into bonds.
In the U.S., stock funds, including both exchange-traded funds and mutual funds, squeaked out a miniscule $4 billion net inflow this year, while fixed income-focused managers collected a monster $86 billion, according to EPFR.
Burned by two bubbles in the last decade and facing the second global financial crisis in three years, investors simply don’t have the risk appetite for stocks.
Investors tried to embrace equities in the first part of the year, but began to pull money out during the summer as the debt ceiling debate domestically flared up and fears of a Greek bailout grew.