Stock Fund Redemptions Reach 'Disturbing' Levels: Flow of Funds
quote.bloomberg.com
Boston, June 17 (Bloomberg) -- Increasing numbers of
Americans are taking a more active role in managing their money
as they shuffle assets between stock mutual funds and other
investments more rapidly than ever.
About $257.3 billion was redeemed from stock funds during
the first four months this year. That's up 59 percent from the
$162.3 billion yanked in the same period a year ago, according to
the Investment Company Institute, the industry's trade group.
Offsetting this year's withdrawals were $316.3 billion of
new investments in stock funds. This meant a net $56 billion,
including exchanges from bond and money market funds, went into
stock funds in the four-month period ended April 30, the lowest
net inflow to start a new year since 1995, the ICI reported.
''The redemptions are disturbing if, as some speculate, they
reflect a shortening of people's investing horizon,'' said
Lawrence Lasser, chief executive of Putnam Investments, the fifth-
biggest U.S. fund company.
[...]
Financial advisers say they're getting more requests from
investors to take their money out of stock funds.
''We've had clients raise a significant amount of cash
against my advice,'' said Tim Medley, a financial adviser in
Jackson, Mississippi.
The stock fund picture would look much worse if it weren't
for the steady inflow of money from 401(k) retirement plans and
other long-term capital accumulation investment programs.
About three-quarters of the net new investments in equity
funds comes each month from retirement-related accounts,
according to New York-based Strategic Insight.
[...] |
