Everyone is pouring money into index funds and riding the wave
$13 billion of the $19 billion that flowed into equity funds was earmarked for large-cap index funds.
FUNDS WATCH: A Rush to Index Funds
It's no secret that over the last few years, mutual funds that track the Standard & Poor's 500-stock index have been on a roll, outperforming their actively managed peers by wide margins. This year, however, investors are really taking notice.
Through March 17, an astonishing 68.4 percent of the new net cash flow into equity funds has gone to large-capitalization index funds, according to Robert Adler, president of AMG Data Services, a data company in Arcata, Calif. In dollar terms, $13 billion of the $19 billion that flowed into equity funds was earmarked for large-cap index funds.
During the same period last year, just 16.4 percent of total equity fund flows were into large-cap index funds, or $6.8 billion of the $41.3 billion total.
"New investors are making a pure market play," Adler said, adding, however, that strong inflow into a fund category could quickly reverse.
New York Times |
