Wednesday, October 15, 2008

The Debts of the Spenders: US Mutual Funds Face Record Redemptions

The stock market sell-off has triggered record redemptions from retail investors. Trimtabs estimates that equity mutual funds had an estimated $8.8 billion outflow on Friday, October 10, alone ($5.6 billion from U.S. Equity Funds and $3.2 billion from Global Equities) while bond funds had a record $10.2 billion one day outflow. For last week as a whole outflows were a whopping $65 billion, $40 billion from equity funds ($25.9 from U.S Equity, $14.1 billion from Global Equity and $25.5 billion from bonds). The $55.8 billion in equity fund redemptions so far in October, which would be the largest outflow since the ICI records started in 1984, easily surpasses the prior record set in July 2002, when $52.6 billion was withdrawn from equity funds.


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