Shaken by market volatility, continued high unemployment, and concerns about global economic growth, the US fund industry is on pace for just $80 billion in net inflows to stock and bond mutual funds in 2011, a 67% decline from 2010, according to a new report.
Strategic Insight, New York, published this finding in a summary of results from a survey of the U.S. fund industry.
The 2011 estimate, the report says, would be significantly less than the $246 billion in net inflows that long-term mutual funds drew in 2010 and the $364 billion in net inflows seen in 2009.
One reason that smaller net-flows are expected for 2011 compared with 2010 is a significant drop in flows to bond funds, says Strategic Insight. The dip is a sign that volatility fatigue has pared investors’ willingness to participate in financial markets, though investors have continued to turn to bond funds as a source of income at a time of extremely low yields.