While October has seen some wild swings in the performance of the stock market, at least through the first three quarters of the year, many investors remain invested in mutual funds, new research shows. Strategic Insight, the mutual fund research group, reported October 7 that for the first nine months of 2008, mutual fund cash inflows across all investment segments exceeded $220 billion. In September, there was about $50 billion in equity fund net outflows, excluding ETFs, amounting to about 1% of all equity fund assets. However, Strategic Insight pointed out that equity ETFs saw net inflows of nearly $40 billion during the same month. Equity mutual funds’ portfolio managers were “sitting on more than $300 billion in cash,” the company noted, which “likely buffered some of September’s net redemptions by fund shareholders.”
Stock fund net redemptions for the first nine months also represented about 1% of equity fund assets in aggregate, despite the more than 20% drop in the S&P 500 index for the same period.